Libya's 120,000 b/d Zawiya refinery offline due to fault: sources

Libya's 120,000 b/d Zawiya refinery is totally offline due to an electrical failure, sources told S&P Global Commodity Insights Sept. 24, worsening a fuel crisis and piling more pressure on the country's ailing oil sector.

The refinery, which is among Libya's largest, has two oil producing units with a combined capacity of 120,000 b/d, and runs on light, sweet crude from the Sharara and El-Feel fields. It is operated by the Zawiya Oil Refining Company, a subsidiary of the Libyan National Oil Company.

Sources said one of the units was already offline for maintenance when, in the early hours of Sept. 24, the second went out of service "due to an electrical fault in the refinery". The fault occurred at approximately 1 am local time.

The refinery has faced feedstock challenges since early August, with the NOC declaring force majeure on the 300,000 b/d Sharara and 80,000 b/d El-Feel fields due to shutdowns by political actors.

Oil is also normally exported from the Zawiya port by joint-venture Akakus and NOC subsidiary Agoco.

It was not clear whether exports were continuing from the Zawiya port, but a confidential Libya production report for Sept. 23 shared with Commodity Insights showed output at the Sharara field at just 90,000 b/d, all of it destined for the Zawiya refinery. Meanwhile, Sharara crude in storage for export was zero, the report noted.

Zawiya produces diesel, fuel oil, jet fuel, gasoline and LPG.

Libyan oil production as of Sept. 23 was 562,000 b/d, according to the report, well below its capacity of over 1.15 million b/d.

The North African country's lifeblood oil sector has been gripped by a political crisis since Aug. 26, when the eastern faction in Benghazi began shutting down oil fields and terminals in response to efforts by the Tripoli-based western government to replace central bank chief Siddiq al-Kabir.

UN-led talks in Tripoli appeared to have reached a minor breakthrough Sept. 3, but no agreed candidate to replace Kabir has yet been agreed. The governor fled to Istanbul in early September in fear of militia violence.

Libya boasts Africa's largest crude reserves but has seen little peace since the fall of Moammar Qadhafi in 2011, with political actors frequently disrupting crude and refined product production.

The Zawiya refinery has been frequently caught up in the chaos, having been hit with an airstrike in December 2019 and suffered heavy damage in armed clashes in April 2022. As recently as April 2024 it was targeted by armed groups, according to reports.

Libya pumped 990,000 b/d of crude in August, according to the latest Platts OPEC Survey from Commodity Insights.

Even before the full-scale shutdown Libya was facing a fuel supply crunch, with queues at pumping stations running several miles long, according to eyewitnesses.

The shortages were exacerbated by poor weather, which prevented refined product tankers from docking in Libya ports.