London — Libya's National Oil Corporation (NOC) has declared force majeure on crude oil loadings from the country's biggest oil field due to a forced shutdown caused by the presence of militia, it said Monday.

NOC demanded that the armed militia claiming attachment to the local Petroleum Facilities Guard (PFG) immediately withdraw from the Sharara field without "pre-condition."

"The shutdown of Sharara will result in a daily site production loss of 315,000 b/d, with an additional loss of 73,000 b/d at El Feel due to its dependence on Sharara for electricity supply," NOC said in a statement.

Operations at the Zawiya refinery are also at risk due to their dependence on Sharara and the refinery "will cease producing essential fuels for local consumption unless alternative supply is identified," it said.

The "unnecessary shutdown" at Sharara will cost the Libyan economy $32.5 million/day, NOC said.

The PFG occupied the field on Saturday with the help of locals. The country's southern region is suffering from severe economic conditions and frequent power outages.

Earlier this week, NOC also warned that the forced closure would have "devastating" effects on the country's economy, other nearby upstream and downstream projects and would exacerbate a local fuel supply crisis.

"The presence of this group is a real threat to the field and to the future of our country" said NOC chairman Mustafa Sanalla. "I want to be clear, this militia has to leave the field immediately. We stand wholeheartedly with the people of the south and understand their concerns. At NOC we are doing all we can to improve the living conditions of the residents. Their legitimate demands and grievances however have been used by criminals who are only in pursuit of self-interest."

Security problems continue to plague the Libyan oil sector, which has seen dramatic swings in production over recent years, as rival militias vie for power and control of fields.

This comes as Libya's oil production has fallen sharply over the past few weeks as bad weather hit output and exports at key oil facilities.

On Wednesday all of its oil export terminals were shut, but by Friday all terminals had reopened, according to a NOC spokesman.

Libya pumped 1.05 million b/d in November, according to the latest S&P Global Platts OPEC survey, well below its pre-2011 capacity of 1.6 million b/d.

--Eklavya Gupte, eklavya.gupte@spglobal.com

--Jack Jordan, jack.jordan@spglobal.com

--Edited by Jonathan Fox, newsdesk@spglobal.com