Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

NOC declares force majeure at Marsa al Hariga

NOC's chairman Mustafa Sanalla
NOC's chairman Mustafa Sanalla

The National Oil Corp. (NOC) has declared force majeure at its Marsa al Hariga terminal, as of April 19, blaming the Central Bank of Libya (CBL).

The oil company and CBL have had a long-running dispute that had appeared to be resolved in mid-March. NOC has blamed CBL, even while the political debate over the budget rages.

NOC blamed the CBL for continuing to fail to provide cash for the oil sector. As such, the Arabian Gulf Oil Co. (Agoco) has been unable to sustain its operations and halted production, shuttering around 280,000 barrels per day of oil.

Agoco exports the Sarir and Messla crudes from the Marsa al Hariga port.

Financial frustrations

Stoppages will cost 118 million Libyan dinars ($26mn) per day, the company said.

NOC said it placed the blame for Agoco’s cash problems squarely on the CBL. The financial institution has failed to make payments approved by the previous Government of National Accord (GNA), from November 2020.

CBL has provided only 2% of the cash that the oil sector requires for the targets set for 2021, NOC said.

Further, CBL has spent oil revenues on “illusive credits and unnecessary goods”, NOC continued. The company said the bank was behind “all the major technical problems” in the oil sector since September 2020.

Libya has not yet passed its national budget. This new agreement does set out cash for NOC, said to be around $1.7 billion.

The eastern-based House of Representatives has objected to the document, which the Government of National Unity (GNU) created.

Verisk Maplecroft’s North Africa analyst Hamish Kinnear said that it was unclear which side was right.

The CBL may have held back funds promised by the GNA, he said. “The CBL, however, is now formally subject to budgetary requests issued by the GNU, the GNA’s successor government that took office in March 2021. As the GNU’s budget is held up, which institution is entitled to which funds is unclear.”

Kinnear predicted international pressure would drive a resolution of the force majeure within one to two weeks.

Service impact

The oil sector “is in more trouble than ever”, NOC said. It is inevitable that further disruption will come, with an impact on service companies and flights.

“We have repeatedly warned of the consequences of ignoring the integrity of the assets of the [NOC] and the serious damage that this measure poses to equipment and surface facilities, as well as a real threat that leads to the destruction of the remaining oil assets and its disastrous impact on the country’s economy,” said the company’s chairman Mustafa Sanalla.

NOC said the CBL had politicised the oil sector. The company said it would take steps to secure its future and also asked the Attorney General to take the needed legal steps to protect Libya’s income.

Kinnear said NOC’s force majeure was an innovation, but not in a good way.

“For an oil sector battered by years of oil blockades imposed by militias seeking extra cash, it is hardly a helpful innovation, particularly as the NOC attempts to attract foreign investment from IOCs back to the country.”

Update at 5:00 pm with Kinnear comments. 

Recommended for you

More from Energy Voice

Latest Posts