Sharara Oilfield Pipeline Shutdown Threatens Force Majeure Declaration

Libya's Sharara oilfield is facing a force majeure risk after an armed group shut down a crude oil pipeline, cutting production by approximately 200,000 barrels per day. According to Libyan political researcher Ahmed Orabi, Sharara's output has fallen to between 100,000 and 105,000 bpd, compared to its production capacity of nearly 300,000 bpd.

The shutdown occurred after members of the Petroleum Facilities Guard closed valve No. 7 on a major crude oil pipeline linking Sharara to the Zawiya terminal. Orabi pointed out that National Oil Corporation (NOC) Chairman Massoud Suleman initially stated that Sharara was operating normally, but later told Reuters that the field had experienced a partial reduction in production.

The closure of valve No. 7 caused pressure to build up in the transportation pipeline, resulting in a significant reduction in overall production. Technical teams have been unable to reach the areas around valves No. 6 and No. 7, leaving the shutdown unresolved.

The NOC has called on the Petroleum Facilities Guard to assume its responsibilities and restore the pipeline, but efforts so far have yielded no results. The recurring disruptions to oil production are adding to Libya's economic challenges, which include pressure on the Libyan dinar and a widening gap between official and parallel-market exchange rates.