Smoke and flame rise from an oil storage tank that was set on fire amid fighting between rival factions at Ras Lanuf terminal, Libya in this handout picture released on June 18, 2018. The National Oil Corporation. Handout via Reuters
Reuters

All oil exports from Libya’s east have been suspended after operations halted at two key ports, the Tripoli-based National Oil Corporation said Monday, in a further blow to the vital sector.

The NOC said a crisis following military strongman Khalifa Haftar’s recapture of ports in Libya’s oil crescent last month has slashed production, previously estimated at one million barrels a day, by 850,000 bpd.

The “National Oil Corporation has declared force majeure on crude oil loadings at Al-Hariga and Zweitina oil terminals”, it said in a statement.

Force majeure frees parties to a contract from their obligations due to circumstances beyond their control.

Exports from two other ports, Ras Lanuf and Al-Sidra, seized from a rival militia by Haftar’s self-styled Libyan National Army (LNA), were already suspended on June 14.

That, along with cuts to gas and other petrochemical exports, amounts to a $67.4 million (57.9 million euro) per day cut in Libya’s heavily oil-dependent public revenues, according to the NOC.

Libya has been wracked by chaos since the 2011 NATO-backed uprising that toppled and killed long-time dictator Moamer Kadhafi, with two rival authorities vying for control.

The LNA recaptured the terminals in June after they were seized by armed groups led by militia leader Ibrahim Jadhran, who had controlled them from 2011-2016.

Haftar’s forces said they would hand the installations and their revenues to an eastern administration that rivals the UN-backed government in Tripoli, warning that “no tanker will be allowed to dock” in the ports without permission from a Benghazi-based rival NOC.

But Libya’s unity government last week urged the United Nations to block any “illegal” oil exports and the Tripoli-based NOC said Monday it was the “only recognised Libyan entity” responsible for oil production and export.

“Despite our warnings of the consequences and attempts to reason with the LNA general command, two legitimate allocations were blocked from loading at Al-Hariga and Zweitina this weekend,” said NOC chairman Mustafa Sanallah.

“The storage tanks are full and production will now go offline.”

In the statement, the NOC called on Haftar’s forces to lift their blockade, saying losses to the public purse “since the attack on Al-Sidra and Ras Lanuf… by Ibrahim Jadhran is more than $650 million”.

Libya produced 1.6 million bpd of oil before Kadhafi’s ouster in February 2011. Production fell by about 20 percent after the revolution, before recovering to one million bpd by the end of 2017.

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