NOC announces lifting of force majeure on Sharara, production slated to rapidly ramp up
On 11 October, the National Oil Corporation (NOC) announced that it had told Akakus Oil Operations to restart operations at Sharara oil field. The NOC said in a statement that it had reached an ‘honour agreement’ with the Petroleum Facilities Guard (PFG) units at Sharara under which the PFG would cooperate in ensuring ‘no security breaches’ occurred at the field. The field will reportedly start pumping at 40,000 barrels of crude per day (bpd) and within 10 days could possibly reach its capacity of 300,000 bpd
Sharara is Libya’s largest oil field, and Akakus is an NOC subsidiary that operates the field along with second party consortium partners Repsol, Total, OMV and Equinor. Despite having lifted force majeure on other important facilities in recent weeks, the NOC had kept Sharara closed due to security concerns, including reports of Russian Wagner PMCs in the vicinity of the field and concerns about Tebu and Tuareg militias traditionally linked to the PFG.
The lifting of force majeure at Sharara (and therefore also downstream at Zawiyya terminal) indicates important progress in the restart of Libya’s oil sector. Not only does it move production levels slightly closer to the 1.2 million bpd at which Libya was pumping before the oil blockade, but it shows that the NOC is gaining confidence in its ability to work with the PFG and pry them from Russian or LNA influence, despite the concerns noted above. This may be in part due to ongoing security and political talks hosted by Egypt and co-facilitated by the United Nations, which have led to agreements on the referral of PFG tasks and responsibilities to the 5+5 Joint Military Council (JMC) (established as part of the Berlin Framework of January 2020) to help ensure regular oil and gas production and export.