Libya Kidnap Shows Oil-Supply Growth at Risk From Insecurity

Credit: Stefan Wermuth/Bloomberg.
Mustafa Sanalla, chairman of the National Oil Corp. of Libya.

Just as Libya resumes oil exports from recently shuttered ports, an attack on its largest field is setting back progress yet again.

An incursion by gunmen into the Sharara field on 14 July and the kidnapping of workers there forced the National Oil Corp. (NOC) to cut output and ban exports. It’s the latest in a string of security incidents that have hobbled Libyan shipments despite repeated attempts to restore flows in the politically divided nation.

“This incident required us to shut down and evacuate a number of stations,” NOC Chairman Mustafa Sanalla said in a statement. The kidnappers released two of the four abducted workers later the same day but still hold two others.

The persistent assaults on the OPEC state’s oil facilities show that any efforts to revive production remain hindered by the same security issues that have long plagued the industry. Following a recent blockade of eastern ports, authorities were able to restart shipments on 11 July—and resume production at the western El-Feel field the following day—only to see Sharara come under attack days later.

“This is just going to be the way it is for Libya until something very significant changes,” said Derek Brower, managing director of research at UK-based Petroleum Policy Intelligence. “One problem will erupt, and then the next. Solving one will sometimes cause the next, and so on.”

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