Libya's Zawiya refinery operating normally after sustaining damage following skirmishes

Libya's 120,000 b/d Zawiya refinery is operating normally after sustaining severe damage following fighting among armed groups near the complex late Oct. 26, a source close to the refinery told S&P Global Platts, as lax security continues to plague the OPEC producer.

State-owned National Oil Corp. said late Oct. 26 it was assessing damage at the refinery from the fighting that struck eight storage tanks for petroleum products and crude oil in the oil movement area and five storage tanks for base oils and chemical additives in a mineral oil mixing and filling plant, leading to a leakage.

The electrical transformer, which is the source of power for the main station for the oil mixing and filling factory, also sustained damage.

NOC chairman Mustafa Sanalla called on the authorities to help protect oil sites in the country.

"The infrastructure of the oil sector represents the lifeblood of the Libyan state," Sanalla said in the Oct 26 statement. "Therefore, we ask the respective authorities to extend their security in and around these sites, protect our workers, and provide security requirements to ensure we continue our operations there."

GNU vs LNA

Libya has been wracked by political instability, with the UN-backed Government of National Unity and the self-styled Libyan National Army vying for control of the country and its lifeblood oil industry. Key oil ports and production fields have seen their operations intermittently disrupted by civil unrest.

The skirmishes around the Zawiya complex come also amid a political battle between Libyan oil minister Mohamed Oun and Sanalla over running the country's oil affairs that is thwarting development of the beleaguered energy sector.

In October Oun suspended Sanalla for the second time in as many months, though he continues to work, according to sources in the country, as the power battle between the two sides shows no sign of abating.

Sanalla is being investigated for financial irregularities at NOC and insubordination, accused of not obtaining ministry permission for work trips in Libya and abroad, among other matters, an Oct. 20 decree from the minister said.

Power struggle

The suspension is the latest episode in a power struggle between Oun and Sanalla over leadership of Libya's energy policy and raises the risks of renewed disruptions to the country's oil flows, as various factions take sides in the dispute.

Oun previously suspended Sanalla in early September, only for Prime Minister Abdul Hamid Dbeibah to overturn the decision a week later and reinstate the NOC chairman.

The long-running rivalry between the GNU and LNA for control of the country has also played into the security concerns and worker grievances at key oil ports and fields that have led to blockades, strikes and sabotage.

Holder of Africa's largest oil reserves, Libya pumped an eight-year high of 1.19 million b/d in March, according to S&P Global Platts survey of OPEC production, though that has trended slightly downward since, averaging 1.13 million b/d in September.

The ministry has said it aims to hit 1.4 million b/d by December and 1.6 million b/d in 2022, dependent on NOC receiving government funding from the still unpassed national government.

Libya's crude output peaked at about 1.75 million b/d in 2008.