As world powers met in Berlin to hash out a way forward in Libya, local pressures in the North African state took virtually all of its oil production offline.
The El Feel and Sharara fields were taken offline on January 19 as local tribes closed pipelines connecting them to the Zawiya port. The tribes are reported as being affiliated with the Libyan National Army (LNA), led by General Khalifa Haftar. These two fields have been producing at around 70,000 and 300,000 barrels per day respectively.
This move to close these fields comes shortly after production from Libya’s east was shutdown. Tripoli-based National Oil Corp. (NOC) declared force majeure following the decision by the LNA to block exports from Brega, Ras Lanuf, Hariga, Zueitina and Sidra. The LNA, the armed group associated with the eastern-based House of Representatives (HoR), ordered the units managing local production to halt exports via these ports.
NOC said this would lead to the loss of around 800,000 bpd, with lost revenues of around $55 million. In December, the company earned around $71mn per day. NOC put production in November at 1.23mn bpd, which would suggest output may fall as low as 60,000 bpd.
The company’s chairman Mustafa Sanalla said shutting down production and exports would have “far-reaching and predictable consequences”. These would include a collapse in the exchange rate, an increase in the deficit and the departure of foreign contractors.
“The main beneficiaries of this act will be other oil-producing states, and the harm will be entirely to Libyans. This is like setting fire to your own house,” Sanalla said, speaking ahead of the Berlin conference. Blockading the facilities is a “criminal act”, he continued, saying NOC would seek to “prosecute perpetrators to the fullest extent possible under Libyan and international law”.
The Berlin conference saw the participants commit to “refraining from interference in the armed conflict or in the internal affairs of Libya”. Attending the meeting were many of the major players participating in the conflict, including Turkey, Russia and the United Arab Emirates.
While the concluding statement was carefully even handed, a statement from United Nations Secretary-General António Guterres made clear that he considered Haftar’s offensive on Tripoli to be a major reason behind the decline in Libyan security. The country had been taking “hopeful steps” until April 2019, when the LNA began to besiege the capital, which is held by the Government of National Accord (GNA).
Russia and Turkey drove progress on a ceasefire, which started on January 12, but talks in Moscow fell apart, seemingly as a result of opposition from Haftar. The New York Times has reported that Haftar has returned to the Russian capital today for further discussions. While the ceasefire appears to be broadly holding, there have been some reported violations.
While Russia has provided support for Haftar, Turkey has backed the GNA. Turkish President Recep Tayyip Erdogan has openly committed troops to the defence of Tripoli and there have been reports that the country has also provided a system intended to halt the use of armed drones.