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Libya's NOC announces 'temporary lifting' of force majeure on Zueitina oil port to relieve storage

Highlights

Zueitina exports were shuttered in mid-April by protesters

NOC said continued closure would create environmental crisis

Production at several Libyan oil fields also halted

Libya's Zueitina oil port has reopened for loadings, after state-owned National Oil Corp. on May 1 announced a "temporary lifting of force majeure" that it said would avoid environmental damage from leaking full storage tanks.

"Zueitina oil port has resumed work temporarily, in order to avoid environmental disasters that may occur…unless the tanks are emptied," NOC said in a statement. "The instructions were given to the operator…to start shipping the available tankers."

The announcement could see the resumption of some 90,000 b/d of flows of Libya's light, sweet crude stream into the Mediterranean market.

NOC declared force majeure on Zueitina on April 18 after protesters demanding the resignation of the government entered the terminal.

The company on April 30 had urgently appealed for the protesters to allow the terminal to reopen, saying that the oil storage tanks there, damaged from years of war, were at risk of "an imminent environmental disaster."

"We have lost a lot of storage capacity and therefore we will not be able to store all the quantity and we are at risk of losing the amount of crude and the line carrying it, due to its waxy nature or the leakage of crude oil from the tanks at the terminal and thus an environmental disaster," NOC said.

"We appeal to whom it may concern in allowing the NOC to operate the terminal immediately or at the very least to allow us to ship one shipment to reduce inventory and obtain additional storage capacities at the terminal to accommodate what is on the line."

Besides the port closure, production has also been stopped at Abuatufol, Al-Intisar, Anakhla and Nafura fields, which are exported through Zueitina, where crude loadings amount to around 90,000 b/d of flows, according to previous NOC statements.

Similar protests have prompted force majeure announcements on Libya's biggest oil field, El-Sharara, and the nearby El-Feel, or Elephant, field, in the west, as well as another eastern port, Marsa el-Brega. In all, some 370,000 b/d of production capacity and 230,000 b/d of recent exports have been affected by the force majeures.

Libya pumped 1.07 million b/d of crude in March, according to the latest Platts OPEC+ survey published by S&P Global Commodity Insights.

Production from the El-Sharara field in Libya, in which Repsol holds a 32% stake as operator, is currently at around 25% of capacity, or 70,000 b/d, following a force majeure declaration in mid-April, Josu Jon Imaz, CEO of the Spanish company, said April 28.

Libyan crude, which is typically light, low in sulfur and yields a good amount of middle distillates and gasoline, is popular among refineries in the Mediterranean and Northwest Europe.