Libya's Sharara oil field partially shut due to protests

Production at Libya's Sharara oil field, the country's biggest, was partially suspended on Aug. 4 after protestors entered the operations room, sources told S&P Global Commodity Insights.

Estimates of production lost ranged from 28,000-70,000 b/d, although it couldn't be determined what current production was. Sharara has a maximum capacity of 320,000 b/d with recent production at 250,000 b/d.

A source at Libya's National Oil Corp said that the disruptors were taking steps to reduce output to zero.

The partial closure has been sanctioned by the Libyan National Army, one source said. The LNA is under the command of eastern warlord Khalifa Haftar, whose troops carried out regular blockades in recent years, reducing Libya's output to just 650,000 b/d in the summer of 2022. The blockades largely stopped after the appointment of Farhat Bengdara as chairman of NOC.

The latest disruption follows a shutdown at the field in January which lasted for two weeks. Libya then imposed a force majeure at the project after protestors from the Southwestern Ubari region closed the field to protest rising fuel prices, poor economic opportunity and unemployment.

Sharara is a joint venture between Libya's NOC, France's TotalEnergies, Spain's Repsol, Austria's OMV and Norway's Equinor. The companies did not immediately respond to requests for comment.

Output challenges

Libya controls Africa's biggest oil reserves, estimated at 48 billion barrels and has ambitious plans to increase production in the mid-term. In early 2024, NOC Chairman Farhat Bengdara noted plans to increase production to 2 million b/d within the next five years. He said at the time that 45 greenfield and brownfield projects would contribute to the increase. It is planning a bid round at the end of 2024, but political unrest and difficulties attracting project financing threaten its production plans.

Relative political stability has kept Libya's crude output at around 1.15 million b/d since February 2024. It produced 1.16 million b/d in June, up from 1.15 million b/d in May, according to the Platts OPEC+ production survey by Commodity Insights. This is well below the 1.6 million b/d it was producing before the toppling of Moammar Qadhafi in 2011.

Libyan crude is typically light, low in sulfur and yields a good amount of middle distillates and gasoline, making it popular in the Mediterranean and Northwest Europe.