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Libya's NOC declares force majeure on three more oil ports

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Libya's NOC declares force majeure on three more oil ports


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The almost total blockade of Libya's oil exports was confirmed Thursday as state-owned National Oil Corporation declared force majeure on crude loadings from the Mellitah, Zawiya and Marsa el-Hariga export terminals.

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In a statement seen by Platts, NOC said the three ports had been unable to carry out crude loadings because of circumstances beyond its control.

"Based on the provisions of force majeure in the Libyan Civil Code, NOC considers these circumstances out of its control and cannot be prevented, which calls us to declare [a] force majeure situation as of 1200 today [1000 GMT]," the statement, signed by NOC chief Nouri Berruien, said.

Almost all of Libya's export terminals are now under force majeure. In August, the company declared force majeure on crude loadings out of the major Es Sider, Ras Lanuf and Zueitina terminals.

The six terminals have an estimated crude export capacity of 1.13 million b/d, making up the vast majority of its total export capacity of 1.275 million b/d.

Oil infrastructure across the country has been hit by protests and strikes since May, which have caused exports to grind to a near halt.

Production has fallen to lows not seen since the end of the 2011 civil war.

Traders said the declaration of force majeure on Mellitah, Zawiya and Marsa el-Hariga came as no surprise.

Exports from Mellitah and Zawiya dried up in late August when the pipeline linking them to the main producing fields in western Libya was attacked and closed.

And Marsa el-Hariga has reportedly been under the control of protesting security guards for some weeks.

"[The force majeure is a little late] but it makes it official now. Anyone with a vessel there basically has to cancel it," a trading source told Platts.

"It confirms what we already know but also implies the outage will last longer," the source said.

Shipowners and charterers said they were not surprised either by the force majeure.

Earlier this week, a Mediterranean charterer said two ships were canceled from the Marsa al-Hariga and Zawiya terminals.

"I have no ships in the Libyan ports as strikes continue to be reported in these region," a Mediterranean shipowner said. GOVERNMENT ACTION

Libya is a key producer of light, sweet crude, which is exported to both Europe and Asia.

Only Bouri and El-Jurf, the country's two offshore terminals, have been exporting crude oil consistently since the start of the disruption.

According to the International Energy Agency's September report, Libyan oil production fell to a post-war low of 150,000 b/d at one point in early September, down 85% from the levels seen in July.

The Libyan government so far has been unable to persuade the protesters to halt their action despite pleas that it was damaging the Libyan economy as a whole.

Prime Minister Ali Zeidan said late Wednesday that he would soon announce the measures it plans to take to break up the protests "in a timely manner."

Zeidan, according to a transcript of a press conference held late Wednesday posted to the prime minister's office website, said Libya was losing $130 million each day from the lost oil and that this was revenue the country could never get back.

"Oil production is currently fluctuating between 200,000 and 300,000 b/d," Zeidan said.

"Low oil production and the estimated quantities will affect the budget -- the Libyan people are losing $130 million per day and this cannot be compensated even if we returned the oil tomorrow," he said.

Asked what steps the government would take to end the blockades at its oil export terminals, oil pipelines and oil fields, Zeidan said: "The action to be taken will be announced in a timely manner and we will make sure it is clear what the state's role will be."

Zeidan last month said he would use force to break up the protests.

Libya's estimated crude export capacity

Es Sider 340,000 b/d
Zawiya 230,000 b/d
Ras Lanuf 220,000 b/d
Mellitah 160,000 b/d
Marsa al-Hariga 110,000 b/d
Zueitina 70,000 b/d
Marsa al-Brega 60,000 b/d
Bouri 45,000 b/d
Al-Jurf 40,000 b/d

Total: 1.275 million b/d

Source: PFC

--Paula VanLaningham,
--Stuart Elliott,
--Robert Beaman,
--Shubhlakshmi Shukla,
--Edited by Maurice Geller,