Oil facilities guards shut down two oil fields to protest not being paid

In spite of an agreement between the UN-backed Government of National Accord (GNA) and the Petroleum Facilities Guard (PFG) it appears that some guards have not been paid and have shut down two oil fields in protest.

Commander Mohammad Aikhbasha told Reuters that PFG members in a southern brigade had shut down the Gulf field and the Al Wafa which produce around 30,000 barrels a day of light condensate. The GNA had not paid the funds required to maintain the security operations. This is happening in spite of a recent agreement to pay the salaries. Electrical workers also have complained of not receiving their pay.

The GNA together with its Tripoli-based National Oil Company (NOC) have faced an uphill battle as it tries to increase production to gain more revenue for the new government. There have been numerous strikes and protests. As well, the eastern parts of the country have their own NOC and the rival government of PM Al-Thinni and the House of Representatives (HoR) are demanding that tankers have a permit from it in order to load oil for export. However, only the Tripoli-based NOC is so far internationally recognized. The two rival NOC's are supposed to be merged but the HoR refuses to merge until certain demands are met. Earlier, some of the oil port facilities were damaged by attacks by militants.

Al Wafa also supplies gas. The commander said: "There are about six oilfields under our guards' control and we have stopped the pumping of crude oil from Gulf and Alwafa oilfields. But gas will be continued from Al Wafa normally." No spokesperson was available from the Tripoli-based NOC to comment on the closures. The southern oil guard brigade also controls other wells and pipelines. The El-Feel and El-Shara had been closed earlier. The Al Wafa field pumps about 30,000 barrels a day of light distillate.

Increasing oil production is also hampered by delays in the GNA delivering funds budgeted for the NOC, according to chairman Mustafa Sanalla. He claims that oil production is lower by about 200,000 barrels a day because of the lack of funding, and is costing millions of dollars. The NOC has lodged complaints with the GNC.

Before Gaddafi was overthrown peak oil production was 1.6 million barrels a day but it now is below 300,000 barrels. Even though the PFG agreed to a deal to reopen two ports, they remain closed. The NOC said the opening would allow it to add 150,000 barrels per day in production. However, the oil fields that feed into the ports are controlled by tribes associated with the HoR government and in alliance with Khalifa Haftar commander in chief of the HoR Libyan National Army (LNA). Until there is an agreement with them, the ports will be starved of oil supplies.

The NOC estimates that the budget shortfalls of the corporation has resulted in production losses of a 35 million barrels or 229,000 barrels a day, valued in total at the $1.56 billion since the Presidency Council (PC) of the GNA took control of spending this March. The prospect of large amounts of Libyan oil entering global markets seems distant. The PFG also shut down the Hammad oilfield due to salary issues last week as well.