Libya’s National Oil Corporation said direct losses from shutting the crude-oil pipeline linking the Sharara field to Zawiya exceeded $75 million through Thursday, 24 September, while lost production surpassed 720,000 barrels since the shutdown began on Monday. It warned that losses would rise if the halt in oil flows continued.
Valve No. 7 shut
The corporation said an armed group had closed valve No. 7 on the pipeline operated by Akakus Oil Operations, causing pressure in the line to rise and output at the Sharara field to fall. The field’s crude is transported through the pipeline to Zawiya port.
The corporation had warned when the incident occurred that it might declare force majeure if the valve could not be reopened.
Fuel supply concerns
In a statement on Friday, the corporation warned that crude stocks at the Zawiya refinery were nearing depletion, which could prompt the shutdown of refining units one after another and disrupt supplies of petroleum products.
It added that a continued shutdown would increase financial and technical burdens in addition to production losses, at a time when the country needs to keep the refinery operating to meet domestic fuel demand.
Pressure on Zawiya facilities
Zawiya’s facilities have faced further pressure since Tuesday, after protesters closed the gates of the refinery and facilities belonging to Brega Petroleum Marketing Company. The corporation said at the time that the disruption threatened refining and petroleum-product distribution operations and could increase the fuel import bill if it continued for long.
Sharara field production
Sharara is one of Libya’s main oil fields. The corporation said last August that its output peaked at nearly 335,000 barrels per day during the month.
The crude pipeline stretching from the field to Zawiya was partially shut in March because of a fire following a leak at another valve, before it was repaired and full production resumed.
