Libya's Wafa oil field, pipeline to Europe shut in coordinated protest: sources

Libya's 37,000 b/d Wafa oil field and Greenstream pipeline, which transports natural gas to Italy, have been shut in a coordinated protest Feb. 25, sources told S&P Global Commodity Insights.

The Petroleum Facilities Guard (PFG), tasked with protecting oil and gas fields in the conflict-plagued North African country, cordoned off the perimeter of the Wafa field in southwestern Libya, preventing staff from entering or leaving, sources said, before forcing operators to restrict operations.

The Wafa project, part of Eni's Mellitah Oil and Gas complex, produces around 37,000 b/d of oil and 22,000 boe/d of natural gas, according to its website.

At the same time, PFG protesters announced the closure of the al-Zawiyah terminal on Libya's northern coast, part of the Greenstream pipeline, potentially hitting exports to Europe, the sources said. Europe has sought to replace some Russian hydrocarbon flows with gas from Libya.

The Misrata oil storage depot was also closed, sources said, while there were reports of disruption to the Zawiyah refinery, a 120,000 b/d facility.

The protest was said to be over salary payment. As a result, the outage is expected to be short lived, although a prolonged closure could result in a fuel crisis in Western Libya.

The issues follow an ultimatum given to Libya's internationally recognized Government of National Unity on Feb. 15 which cited economic grievances.

The state-owned Libyan National Oil Company could not be reached for comment.

Protests disrupting oil and gas flows are a regular occurrence in Libya, which has been engulfed by chaos since the NATO-backed uprising against Muammar Gaddafi in 2011. In January, protesters shut the country's Sharara oil field, its largest, for two weeks.

The country has seen oil output fall in recent years and is currently exempt from an OPEC quota.

Rivalries and jostling between key political figures, such as the chairman of NOC and the powerful central bank governor, also pose a threat to production, experts say.

Eni is the operator of the Mellitah Oil and Gas complex, alongside the NOC.

Gas from Wafa is transported through the 520-km Green Stream pipeline, which connects Libya with to Sicily in Italy. The pipeline has a capacity of some 8 Bcm of gas annually.