Libya’s National Oil Corporation said Friday it expects force majeure will be declared on the ports of Zuetina and Hariga on Sunday due to insufficient storage capacity, as the split between the UN-backed NOC and Libya National Army-supported NOC East that now controls the key eastern ports took a turn for the worse.
Zuetina and Hariga would join key export terminals Ras Lanuf and Es Sider on force majeure. Ras Lanuf has been exporting at around 130,000 b/d, which is almost half its 220,000 b/d capacity. The larger Es Sider terminal normally ships around 260,000 b/d, around 50,000 b/d shy of full export capacity.
The NOC blames the LNA for what it described as preventing “legitimate allocations being loaded by blocking vessel entry to ports” with blockades at Es Sider, Ras Lanuf, Zuetina and Hariga called “crimes under Libyan and international law”. The stand-off between the rival governments is leading to a paralysis in oil exports, with buyers looking elsewhere for sweeter crude grades that Libya offers.
“Due to the limits of storage capacity, AGOCO and Zueitina Oil Co have already taken steps to limit possible pipeline damage. The Sarir refinery may be forced to cease operations, which will restrict local fuel supplies,” the NOC said.
A declaration of force majeure at Hariga and Zuetina would result in the loss of a further 350,000 b/d and wiping out a combined 800,000 b/d from Libyan production, according to the NOC.
OPEC member Libya was producing 950,000 b/d in May before the latest clashes in eastern Libya began to disrupt output, according to S&P Global Platts estimates. The seizure of Libya’s two largest export terminals — Ras Lanuf and Es Sider — by former Petroleum Facilities Guards (PFG) militants on June 14 caused crude production to drop by more than 450,000 b/d. The occupation was short-lived, with the LNA wresting back control days later but a force majeure remains in place on Es Sider and Ras Lanuf crude loadings.
Source: PlattsPrevious Next