Libya: Oil field closures threaten $20.69 bn annual revenue

Libyan oil production reached a value of 99.1 billion Libyan dinars ($20.69 billion) in 2023 with closures now threatening production,  according to The Arab Weekly and agencies.

While only a slight decline from 105.4 billion dinars in 2022, the closure of the country’s largest oil field this week means a 300,000 barrels per day drop in production.

Libya’s oil and natural gas sector has been a significant economic contributor since major oil discoveries in the 1950s. Despite production inconsistencies caused by recent conflict, the country’s economy remains reliant on oil and gas, with oil exports alone accounting for over 50% of Libya’s 2020 GDP.

Mineral fuels, including oil and natural gas, account for over 95% of Libya’s export trade.

On January 7th, the state-run National Oil Corp. (NOC) declared “force majeure” at its Sharara oil field, forcing the suspension of crude oil supplies to the Zawiya Mediterranean coast terminal. Sharara is Libya’s largest oil field and accounts for 300,000 of the country’s 1.2 million barrels per day production.

The country’s El-Feel oil field was also reported to have closed shortly after Sharara.

READ: Libya: Protests result in two oil field closures

NOC and local media attributed the closures to ongoing protests over fuel shortages at the facilities. The protesters also called for infrastructure improvements, having already triggered a 2-day closure at Sharara in July 2023.

Libya has faced massive instability since the toppling of Muammar Gadhafi’s regime in 2011.

With the country now governed by rival administrations in the east and west, each backed by militias and foreign governments, oil and gas production is of massive strategic importance in their struggle for control.

THE ARAB WEEKLY/REUTERS