Libya considers force majeure after oil pipeline valve closure

Libya’s state-owned National Oil Corporation (NOC) said an armed group’s closure of the Sharara crude oil pipeline could shut down the Zawiya refinery and trigger a possible force majeure declaration.

Force majeure is a mechanism enabling a party to terminate or suspend a contract due to an unexpected and exceptional event, without being liable for damages.  

In a statement, the company said its technical teams have been unable to access areas around valves 6 and 7 despite urging the Petroleum Facilities Guard (Southwest) – which is responsible for the security of Libya’s petroleum facilities – to intervene.

The continued closure of valve 7 will inevitably halt production, transportation, and export operations at the Sharara field, directly harming the national economy by reducing state revenues.

NOC called on the group to reopen the pipeline immediately and urged the authorities to provide security and protection for oil sites.

Production at the Sharara oilfield has fallen by around 200,000 barrels per day and is presently between 100,000 and 105,000 bpd, Reuters reported reported, citing two unidentified engineers at the field.

Last week NOC halted operations at three oil sites after members of the Petroleum Facilities Guard shut a valve on a key crude pipeline.

Opec member Libya, hit by years of civil strife, has embarked on a drive to restore oil production to pre-war levels by admitting foreign oil investors.

In June NOC signed production-sharing agreements with several international energy companies following the country’s first licensing round in nearly two decades.

The agreements were signed with Spain’s Repsol and Turkey’s state-owned Türkiye Petrolleri, Italy’s Eni and QatarEnergy, and a consortium comprising Hungary’s MOL Group, Türkiye Petrolleri and Repsol.

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