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22 Mar 2017 | 
 

Libya’s National Oil Corporation (NOC) warned on Monday of a possible declaration of force majeure at the Es Sider and Ras Lanuf oil terminals, two of Libya’s largest oil ports. NOC board member Jadalla Alaokali said a legal waiver for contractual obligations would probably be declared if the violence continued. Libya’s eastern-based Libyan National Army (LNA) lost control of Es Sider and Ras Lanuf to the Benghazi Defence Brigades (BDB) nearly two weeks ago. Since then the LNA has been conducting daily air strikes in the area. Most workers have left the ports.

Libya’s national oil output has fallen by about 10% to 615,000 bpd since the conflict broke out around Es Sider and Ras Lanuf. The BDB says it has handed control of Es Sider and Ras Lanuf to a unit of Libya’s Petroleum Facilities Guard, aligned with the UN-backed government of national accord (GNA) in Tripoli, and that the NOC can continue to operate there. But it remains unclear who is in control on the ground. Oil is no longer being pumped to Es Sider, forcing Waha Oil Co to halt production and also affecting output by Harouge Oil Operations. Both companies are NOC joint ventures.

The violence in Libya’s Oil Crescent has raised concerns of a new escalation of conflict between the eastern and western factions that have been battling for power since 2014. GNA head Fayez Seraj has called for the withdrawal of military forces from the area. He said the Petroleum Facilities Guard should be brought under the control of the NOC. His defence minister, a rival of LNA commander Khalifa Haftar, said late last week that he had requested the urgent deployment of 600 men to support the Petroleum Facilities Guard in the Oil Crescent.

SOURCE: INSURANCE MARINE NEWS/PETER BIRKS

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