Libyan NOC lifts force majeure on crude exports

Spanish Market: Crude oil
15/07/22

Libya has lifted force majeure restrictions on crude exports, one of the country's governments said today.

Government of National Unity (GNU) prime minister Abdelhamid Dbeibeh, in a Tweet, said state-owned NOC's new board had lifted the restrictions "from the oil fields and installations".

The decision was reached in negotiations between tribes and the new NOC board, according to a Libyan source.

The blockades have disrupted most of the north African country's oil output and several export terminals since the second half of April. Today's move could mean the return of crude exports from the Ras Lanuf, Es Sider and Mellitah terminals, and output from the 200,000 b/d Sarir, the 90,000 b/d El Feel fields and others. Assuming no infrastructure damage during the outages, this could push Libyan production nearer to the Argus-estimated 1.06mn b/d average of the first quarter from 600,000 b/d in June.

The move has been prompted by new NOC chairman Farhat ben Gudara, who assumed leadership on 14 July backed by the GNU. But it is unclear if all NOC subsidiaries will defer to the authority of the new management. Although eastern subsidiary Agoco issued a statement welcoming the new leadership, previous NOC chairman Mustafa Sanalla has rejected the GNU's authority to replace him and its overall legitimacy.

Ending the blockades has proven a protracted task. Demonstrator demands have varied from a transfer of power from the GNU to the parliament-backed Government of National Stability, to Sanalla's dismissal and a fair and even distribution of NOC oil revenues — the backbone of Libya's economy. NOC funds have to date been transferred to the central bank and released from there to the GNU.

By Ruxandra Iordache

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