Libya’s New Oil Chief Considering Ending Force Majeure at Ports

Libya’s new head of the state oil company for the eastern region is considering ending force majeure at the North African nation’s two largest ports and will seek to boost crude output.

“Among my priorities will be lifting force majeure at Es Sider and Ras Lanuf,” Nagi Elmagrabi, chairman of the National Oil Corp. for the eastern region, said in a phone interview Tuesday. “I will also seek to increase oil production.”

Libya produced about 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. It’s today the smallest producer in the Organization of Petroleum Exporting Countries, with output of about 400,000 barrels. It has failed to restore production as militias fight for the control of export terminals while tribes and workers block operations at fields and pipelines to seek jobs and better pay.

Libya in December stopped crude exports from the two ports after militias attacked Es Sider, its largest oil terminal. The NOC declared force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, at the two ports the same month.

The government that operates from al-Bayda, in eastern Libya, last week announced that Elmagrabi will take over as chairman of the eastern region at NOC. Elmagrabi said the appointment will take effect later this week.

Sirte Oil

His predecessor, Al-Mabrook Abu Seif, said by phone on Monday that he will return to his previous job as director of computerized operations at Sirte Oil Co., a unit of NOC. Seif led the east Libya-based management of NOC after the country split between two administrations in 2014.

Elmagrabi, an engineer with 26 years experience in the oil industry, said he plans to meet the head of the Petroleum Facilities Guard, Ibrahim al-Jadran, to assess the security situation and the possibility of resuming exports from the two terminals. Ras Lanuf is Libya’s third-largest oil port.

Increased Output

Elmagrabi said he will seek to increase crude output from fields in the eastern region where about half of Libya’s current production is located, with the other half being produced from offshore fields. Tribal and political conflicts have almost completely halted crude production in the western region, where an administration backed by moderate Islamist militias has held sway since last year.

Most of the crude production from the eastern region comes from Arabian Gulf Oil Co., an NOC unit where Elmagrabi worked as director for oilfield facilities until his appointment as head of the eastern-based management of NOC.

Mustafa Sanalla remains in charge of NOC’s operations in the capital and the western region with the consent of the Tripoli-based administration.

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