Libyan production, exports resume after guards' protest at oil field and gas pipeline called off

Oil production at Libya's Wafa field and gas flows through a key pipeline to Italy have resumed following a brief shutdown after successful negotiations between the Petroleum Facilities Guard and the country's UN-recognized government, according to sources.

In a coordinated protest on Feb. 25, the PFG -- tasked with guarding Libya's vital oil and gas infrastructure -- cordoned off the Wafa oil and gas field as well as the al-Zawiyah export terminal, part of the Greenstream pipeline connecting Libya with the Italian island of Sicily, sources told S&P Global Commodity Insights.

The Wafa project -- which produces 37,000 b/d of crude and 22,000 b/d oil equivalent of natural gas according to its website -- is part of the Mellitah Oil and Gas complex, operated by Italy's Eni alongside state-owned National Oil Corporation (NOC). Gas from Wafa is transported through the 520-km Greenstream pipeline, which has an 8 Bcm/year capacity.

The coordinated protests, which also affected the Misrata oil storage depot, were said to be over salary payments and followed an ultimatum given to Libya's western Government of National Unity on Feb. 15 citing economic grievances.

On Feb. 26, sources told S&P Global the short closures had been brought to an end following salary negotiations between the GNU and the PFG, with Prime Minister Abdul Hamid Dbeibeh agreeing to adjust the group's compensation.

Sources said the production impact had been minimal during the one-day closure.

The protests were the latest to disrupt oil and gas facilities in Libya, which has been engulfed by chaos since the NATO-backed uprising against former leader Moammar Qadhafi in 2011.

Political actors and militia groups have frequently targeted energy infrastructure to achieve their aims, with oil revenues accounting for some 97% of government revenue. Currently the country has rival administrations in the west and east.

Libya has seen crude output fall in recent years amid regular outbreaks of fighting. In January, the country pumped 1.02 million b/d, according to the Platts OPEC Survey from S&P Global, following a two-week protest at the 300,000 b/d Sharara oil field, Libya's largest.

However, the lifting of force majeures by IOCs and new exploration activity have raised hopes of an oil sector revival in the North African country.