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Libya's NOC lifts force majeure on exports from Zueitina, Brega terminals

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Libya's NOC lifts force majeure on exports from Zueitina, Brega terminals

Highlights

Oil terminals opened to allow tanker to carry condensate

Libya's oil supply crisis has slashed output by more than half

It pumped 650,000 b/d in June, lowest since Oct 2020: Platts survey

  • Author
  • Dania Saadi
  • Editor
  • Wendy Wells
  • Commodity
  • Natural Gas Oil Shipping

Libya's state-owned National Oil Corp. has a lifted force majeure on the eastern oil terminals of Zueitina and Brega, allowing a tanker to carry condensate for use in power generation in the OPEC member, whose oil supply crisis has exacerbated a tight crude market.

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The lifting of force majeure follows intense negotiations to allow the tanker to enter the terminals and ship condensate, a step that will be followed by other steps, NOC chairman Mustafa Sanalla said in a July 13 statement.

Libya, whose supply disruptions have escalated in past weeks due to blockades and shutdowns at its key oil infrastructure, pumped 650,000 b/d in June, its lowest since October 2020, according to the latest Platts survey by S&P Global Commodity Insights.

Libya's crude production has remained well below its current capacity of 1.2 million b/d in recent months due to protests and blockades at its energy infrastructure amid a deepening political crisis.

NOC said on June 30 Libyan crude exports had ranged from 365,000 b/d to 409,000 b/d, a decrease of as much as 865,000 b/d from normal rates, as it declared force majeure on crude exports out of Es Sider and Ras Lanuf terminals, as well as at the El Feel oil field, following the previous closures of the Brega and Zueitina terminals.

Four key terminals

Libya's eastern Gulf of Sirte includes four main oil export terminals with a total capacity of 630,000 b/d – Es Sider (250,000 b/d), Ras Lanuf (200,000 b/d), Brega (90,000 b/d) and Zueitina (90,000 b/d).

A team of experts from NOC and its subsidiaries are in negotiations to allow tankers to call on Es Sider and Zueitina terminals as well as resume production from oil fields managed by Waha Oil Co. and Mellitah Oil and Gas Co., Sanalla said.

NOC subsidiary Waha Oil Co. pumps from fields in the Sirte Basin, while Mellitah Oil and Gas Co, a joint venture between NOC and Italy's ENI, operates El Feel, one of the country's largest oil fields.

In the past few days, NOC has been in talks with the Petroleum Facilities Guards and the head of the energy committee in parliament that led to conviction about the importance of shipping condensate to deal with gas shortages in the east and maintaining fuel supply to power plants in the area, Sanalla added.

Sanalla also sought to reassure international oil markets about NOC's resolve to maintain its oil supply, adding companies have been instructed to boost oil and gas output gradually.

Political standoff

The protesters who are leading the oil blockades have been calling for the removal of the Tripoli-based Government of National Unity and a revamp of the political process.

The Libyan National Army, which supports the east-based Government of National Stability, has backed these protests. The LNA, led by Khalifa Haftar, controls most of Libya's oil and gas infrastructure but does not control sales and the distribution of revenue.

The GNU has refused to cede power to the eastern-based GNS, escalating political divisions in the country.

Platts Analytics said it expects Libyan crude supply to rebound to 820,000 b/d in the third quarter, "but with two governments claiming to rule Libya, and a surfeit of well-armed militia, more chaos is likely."

Libya holds Africa's largest proven reserves of oil and its main light sweet Sharara and Es Sider export crudes yield a large volume of middle distillates and gasoline, making it popular with refineries in the Mediterranean region and Northwest Europe.