By August 30, 2016 Read More →

Libyan oil guards say closed two oilfields over payment delays

Libyan oil guards

File photo from January of this year showing smoke rising from burning oil storage tanks in the port of Ras Lanuf, Libya. Reuters photo.

Libyan oil guards say closed two oilfields over payment delays

By Ahmed Elumami

TRIPOLI, Aug 30 (Reuters) – A Libyan armed force controlling some of the country’s southern oilfields has stopped pumping at two of them because the government has not paid the funds needed to maintain security operations, a brigade commander said on Tuesday.

The closures underscore the new Libyan government’s complex task in reviving oil production, which has been battered by strikes, protests and Islamist militant attacks since the fall of Muammar Gaddafi in the 2011 uprising.

Commander Mohammad Ahmad Alkhbasha told Reuters the Petroleum Facilities Guards’ southern brigade had shut the Gulf field and the Al Wafa field, which usually produces around 30,000 barrels per day (b/d) of light oil condensate.

Al Wafa also produces gas supplies for Mellitah port, jointly run with Italian oil company ENI for export to Italy.

“There are about six oilfields under our guards’ control and we have stopped the pumping of crude oil from Gulf and Alwafa oilfields,” the commander said. “But gas will be continued from Al Wafa normally.”

A spokesman for the state-run National Oil Corporation was not immediately available to confirm the closures.

The southern oil guard brigade controls Al Wafa, Gulf, Al-Khamsa, El-feel, El-Sharara, and Senawang oilfields, and a number of wells and pipelines. El Feel and El Sharara had already been closed.

NOC chairman Mustafa Sanalla said on Monday that delays in the budget from Libya’s new government for the state energy company were undermining oil production, losing around 200,000 barrels per day at the cost of millions of dollars.

Libya’s oil production is below 300,000 barrels per day compared with the 1.6 million b/d peak before the fall of Gaddafi. Oilfields and ports have fallen under the control of rival armed factions allied with two competing governments that emerged in 2014.

In March this year, a U.N.-backed unity government in Tripoli has tried to bring the factional fighting to an end, restart oil production and revive the economy. But it faces resistance from hardliners who reject its authority.

The Petroleum Facilities Guards last month agreed to a deal to reopen two major ports under their control, an agreement the NOC said would allow it to add 150,000 b/d a day in production. But the ports remain closed.

(Additional reporting by Ayman El Warfalli; writing by Patrick Markey; editing by Louise Heavens and Alexandra Hudson)

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