Libya's oil production plunged Tuesday to its lowest level since
2011 after an armed group closed the country's largest western
oilfields operated by Eni SpA and Repsol SA, deputy oil minister
Omar Shakmak said.
The member of the Organization of the Petroleum Exporting
Countries is currently producing 320,000 barrels per day, compared
with the pre-war levels of around 1.6 million barrels, Mr. Shakmak
told the Wall Street Journal.
"Both El Feel and Sharara fields are closed which is hitting our
production badly. The group behind the shutdown of the fields and
the pipeline linking them to the port, were not oil workers or
Petroleum Facilities Guard members and it is the defence ministry
that should protect the fields and fix this problem," he said.
El Feel oilfield is operated by Mellitah--a joint venture
between Libya's state energy firm, the National Oil Corporation, or
NOC and Italy's Eni, while Sharara is run by Akakus--a joint
venture between NOC and Spain's Repsol.
Mr. Shakmak said it is unclear what the armed group, which he
described as "third party", wanted or when the oilfields will
resume production.
Striking workers have recently hit eastern and central Libyan
ports and effectively shut down shipments from terminals there,
which account for more than half of Libya's $60 billion of oil
exports annually. The workers, who had already slashed the
country's output by more than half earlier this month, are
demanding the payment of wages, as well as higher salaries or more
jobs. However, officials said the situation was more precarious,
with armed guards trying to sell oil without government
approval.
Last week oil exports from the port of Marsa al Brega resumed
after a force majeure was lifted as protesters ended their blockade
of the terminal. Es Sider, the largest of Libya's oil terminals
with a 350,000 barrel-a-day capacity, as well as Ras Lanuf and
Zueitina in eastern Libya remain closed.
Libya's troubles come at a time when the world's largest oil
producers are facing increasing competition from rising production
in places like the U.S., where the extraction of oil trapped inside
shale rock has seen output soar.
According to the international Energy Agency, demand for oil
from OPEC dipped below 30 million barrels a day in the first
quarter of this year and is expected to fall further next year.
According to the IEA, Libya produced just 1 million barrels a
day in July.
"In the short term, we are not worried about our market share,
but if this continues for longer than just a few days, we are
facing a threat from other OPEC producers like Saudi Arabia upping
their production and squeeze us out," Mr. Shakmak said.
Write to Summer Said at summer.said@wsj.com and Sarah Kent at
sarah.kent@wsj.com
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