Libya's National Oil Corporation (NOC) has declared force majeure at the Sharara oilfield, after protests halted production at the country's largest field earlier this week.
Considering the current circumstances at Sharara that prevented NOC from carrying out crude oil loading operations, the state oil company of Libya declared force majeure effective August 7, NOC said in a notice.
Sharara fully halted oil production on Monday after output was curbed during the weekend due to protests.
The oilfield, which has the capacity to pump more than 300,000 barrels per day (bpd) of crude oil, last produced around 270,000 bpd on Saturday.
However, the field began to gradually cut production on Saturday after workers at the oilfield were told to do so, according to Bloomberg's anonymous sources.
Earlier on Monday, Libya's internationally recognized government accused its rival government in the east of "political blackmail" following protests that led to operational curbs at the Sharara oilfield.
The statement said the output reduction at the field was extortion but did not elaborate on the claim.
Reuters reported on Saturday that protesters at the field had forced the personnel at the field to begin winding down production, citing two unnamed engineers working at the field.
The Sharara field is a regular target for warring political and military factions in Libya, which boasts the biggest oil reserves in Africa but is having difficulty exploiting them fully due to the complicated political situation in the country.
The latest shutdown at Sharara took place in January this year, again prompted by protesters demanding greater involvement of the government in regional affairs such as job creation and more investments in the regional economy.
Earlier this year, the head of the National Oil Corporation said that there were plans to boost the total to 1.5 million barrels daily by 2025 and expand it further to 2 million bpd in 2027. Events such as the current ongoing output cuts at Sharara, however, suggest these plans will be quite challenging to implement in the absence of a radical shift in the country's political environment.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More