Since January, Libya’s oil fields and facilities were shut down. Due to the closure, Libya’s oil output decreased from over one million barrels per day to less than 100,000 barrels. Libya’s oil-dependent economy faced permanent collapse. However, this month the State looks forward to reopening its oil fields and resuming production and export.
Civil War in Libya
Since the ousting of Moammar Gadhafi back in 2011, Libya has been torn by civil war. In 2015, the country founded a new government under a U.N led agreement. Under the agreement, Fayez Sarraj would head the Libyan government in Tripoli. Additionally, Mr. Fayez would be Libya’s legitimate authority and lead the State.
Gen. Khalifa Haftar, a military leader in the country’s east, was not pleased with the efforts for a long-term political settlement. Haftar hence decided to oust the U.N recognized government of national accord (GNA), based in Tripoli by force. In his relentless mission, the unpredictable general decided to apply economic pressure on the GNA by illegally shutting down oilfields.
Closure of Oil Fields in Libya
The closure of oil fields posed a disastrous effect on the Libyan economy and Libyans’ livelihoods. The closure would significantly affect Libya because almost 80% of the hydrocarbon resources in oil-dependent Libya are in the eastern regions. The eastern regions are under the control of Gen Haftar and his militia and some Russian Wagner mercenaries.
Haftar ordered his men to close oil fields and facilities in the regions he controlled. The move mainly aimed at cutting down revenues to the government, using oil as leverage against the new government. Haftar blocked oil export from Brega, Hariga, Zueitina, Ras Lanuf, and Sidra ports. He ordered the blocking of pipelines linking the giant Sharara oilfield to the Zawiya oil terminal and El Feel oilfield to the Mellitah terminal.
The production of oil in Libya was expected to collapse to 72,000 barrels a day, which would be the lowest since 2011. As months went by with the closure still in play, Libya’s oil revenues retreated to $90 million this August from $2 billion in August 2019.
Reopening of Oil Field in Libya
This Friday, however, warlord Haftar announced he had lifted the blockade he had imposed. The leader of the illegitimate armed forces had imposed closure of Libyan oil wells for eight months. News stations broadcasted his speech live for all Libyans to see on Friday. In his remarks, he said oil production and export would resume. He further added that all necessary conditions and measures to guarantee the fair distribution of oil revenues initiated the resumption.
After General Haftar made his announcement, The National Oil Corporation said that it had ended all the closure of oil fields. The NOC is responsible for the extraction, distribution, processing, and export of Libya’s oil. The corporation lifted the force majeure from oil fields and ports that were not occupied by militants loyal to Khalifa Haftar. NOC looks to secure funding and investments to restore oil production in Libya quickly. The corporation faces huge extra costs to repair damaged infrastructure during the closure period.
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