Photographer: Benjamin Lowy/Getty Images

Libya’s Biggest Oil Field Halted by Workers’ Protest

  • Sharara was pumping 270,000 barrels a day before shutdown
  • Country is exempt from OPEC output cuts due to internal strife

Libya’s biggest oil field shut down due to a protest by workers, stalling a revival in the politically divided country’s production of crude.

Sharara closed on Wednesday, according to a person with direct knowledge of the matter who asked not to be identified because they aren’t authorized to speak to the media. Workers are protesting a colleague’s death at the field, halting about 270,000 barrels a day, according to another person familiar with the matter, who also asked not to be identified because they’re not allowed to speak to the media.

Before the halt, Libya’s oil output was at its highest since October 2014, when the country pumped 850,000 barrels a day. The recent increase, along with higher production from Nigeria and swelling stockpiles in the U.S., were undermining OPEC’s strategy to re-balance the market and prop up prices. The Organization of Petroleum Exporting Countries and allied suppliers agreed on May 25 to extend a deal to cut output until the end of March to battle a global oversupply.

The shutdown is only temporary and a force majeure is unlikely to be declared, an NOC official said. Mustafa Sanalla, head of the state oil company, didn’t answer phone calls or text messages seeking comment.

Crude from Sharara in western Libya had resumed flowing to the Zawiya refinery in late April, after a three-week closure. El Feel, a field also known as Elephant, re-started in April as well, after having been halted since April 2015.

Libya, with Africa’s biggest crude reserves, pumped as much as 1.6 million barrels a day before a political uprising in 2011.

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