“Political Blackmail” Squeezes Output at Libya’s Largest Oilfield

Libya’s internationally recognized government has accused its rival government in the east of “political blackmail” following protests that have led to operational curbs at the country’s largest oil field, Sharara.

The statement claimed 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. Sharara has a capacity of 300,000 bpd.

Bloomberg then reported that production at the field had been reduced by some 50,000 barrels daily to 210,000 bpd because of the protests, citing unnamed sources in the know as saying employees at the field were given orders to start reducing production.

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.

Libya’s oil production has hovered around 1.2 million barrels daily over the past couple of years, after slumping to just 100,000 bpd in the wake of the regime change in the country. Before that, Libya was producing 1.8 million barrels daily.

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 Irina Slav for Oilprice.com

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