Libya Protests Block Oil Exports, Risking Recent Stability

(Bloomberg) -- A fresh wave of protests at Libyan oilfields and ports is threatening to derail months of stability in the OPEC member’s crude production and exports.

Output may drop by as much as 800,000 barrels a day in the coming days due to the disruptions, according to a Libyan official. While protests due to domestic unrest have beset the country’s oil operations for much of the last decade, a power struggle between its oil minister and the head of the state-run National Oil Corp. has fueled the latest conflict.

At the eastern ports of Ras Lanuf and Es Sider, which is the country’s largest for exporting crude, demonstrators have halted operations and blocked tankers from loading, according to people familiar with the matter who asked not to be identified because they aren’t authorized to speak publicly. 

Officials at the NOC were not immediately available to comment.

Although Libya has Africa’s largest crude reserves, production has been erratic since the overthrow of former leader Moammar Qaddafi in 2011. A truce last year in the country’s long-running civil war, combined with the formation of a unity government, has helped to stabilize production in recent months at almost 1.2 million barrels a day. 

Protesters said over the weekend that they would halt exports at eastern ports. At Es Sider, which can process 300,000 barrels of oil a day, demonstrators calling for the dismissal of NOC Chairman Mustafa Sanalla have taken over the control room and have prevented the Suezmax tanker Yannis P., from loading, according to the people. At Ras Lanuf, the protests have stopped the tanker Kriti Bastion from loading.  

New Protests

Separate protests by students and fresh graduates demanding jobs have erupted at the key Hariga port, which exports about 250,000 barrels a day of Sarir and Mesla crude. The Suezmax tanker Mikela P. is due to reach Hariga on Sept. 9, vessel-tracking data compiled by Bloomberg show. 

Groups of demonstrators have also threatened to stop production at oilfields including Sharara, the country’s largest, and others such as Nafoora in the east. 

Tensions have risen recently, after oil minister Mohamed Oun asked the government to dismiss Sanalla and reshuffle the NOC’s board. The jostling follows a decade of conflict and tension between rival governments that eased after the formation of a unity authority. 

Oun was appointed in March, making him the country’s first oil minister since 2014. Sanalla, meanwhile, has been the NOC’s boss since 2014 -- holding a job that allowed him to effectively run the energy sector, including representing Libya meetings between the Organization of Petroleum Exporting Countries and its allies. 

(Updates with additional details, including possible output decline.)

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