NOC lifts force majeure on last oilfield after blockade

Alwasat - Cairo Mon 26 Oct 2020, 06:12 PM
alwasat radio

Libya's National Oil Corp (NOC) on Monday ended force majeure on the last facilities closed by an eight-month blockade of oil exports by eastern forces as it pushes to restore production of one million barrels per day (bpd) within four weeks.

Ending force majeure - which suspended contract obligations due to circumstances beyond its control - on El-Feel oilfield means the NOC can theoretically bring all facilities back on stream.

"NOC announces as of today, Monday Oct. 26, the end of the closure of each of the Libyan oilfields and ports," it said in a statement.

It points to the gradual resumption of production towards the levels before January, when Khalifa Haftar's eastern-based Libyan National Army (LNA) stopped exports.

Haftar in September agreed a deal with the deputy head of the internationally recognised Government of National Accord (GNA) in Tripoli, in the west, to allow oil output to return.

However, the NOC has only gradually lifted force majeure on fields and ports as it announced that fighters from Haftar's military coalition had left them.

It has also said that output may take longer to restore because of damage caused by the long shutdown. Last week production stood at about 500,000 bpd.

On Friday, declaring it had lifted force majeure on the two major remaining closed oil ports of Ras Lanuf and Es Sider, the NOC said it expected output to rise to 800,000 bpd in two weeks and to one million bpd in four weeks.

The faster-than-expected return of Libyan oil helped trim global prices on Monday, extending last week's losses, adding to concerns about reduced demand because of rising coronavirus cases in the United States and Europe.

"In an environment where there are renewed worries over the demand outlook, the last thing the market needs right now is additional supply," said Warren Patterson, ING's head of commodities strategy.

Three tankers are expected to load at Es Sider and Ras Lanuf terminals this week, shipping sources and Refinitiv Eikon ship tracking showed.

The Nissos Serifos and Sealoyalty are heading to Es Sider and the Ottoman Nobility to Ras Lanuf.

Libya is also expected to load eight cargoes of Sharara crude in November, or about 160,000 bpd, according to a source with direct knowledge of the matter.

On Sunday the first tanker in eight months docked at al-Zawiya port and began loading, an engineer there said, after force majeure was lifted last week on Sharara, Libya's biggest oilfield.

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