Libya Key Oil Field Pipeline Starts Again After Shutdown

  • Petroleum Facilities Guard reopens valve on pipeline
  • Opening follows days of disruptions to Sharara field output

A Libyan security force has reopened a key oil pipeline, a step toward allowing the nation’s largest oil field to resume output after three days of disruptions.

The Petroleum Facilities Guard, which is tasked with securing oil installations, opened a valve that had been shut on the pipeline linking Libya’s Sharara field to its Zawiya port, Wessam Al-Messmari, an office manager for the group, said by phone. Details as to the cause of the closure weren’t immediately clear.

Earlier Tuesday the state-run National Oil Corp. announced the restart of the Sharara field and the lifting of force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, on crude exports from the Zawiya terminal. The NOC later removed the statement from its website.

Sharara has experienced several brief shutdowns caused by different groups this year. The oil field closed for two days in June due to a protest by workers. Pumping was interrupted for several hours earlier this month after armed protesters shut some facilities. Production was 230,000 barrels a day, a person familiar with the situation said at the time.

Libya is trying to revive its oil production and exports in the midst of continuing political uncertainty. In July, crude production was at a four-year high and exports were the most in three years, according to data compiled by Bloomberg. While the expansion has helped Libya’s oil-dependent economy, the Organization of Petroleum Exporting Countries is trying to cut global supplies. That effort has been weakened by recovering output by OPEC members Libya and Nigeria.

The estimated the value of lost oil production during the past three days is about $40 million, according to the NOC.

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