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article imageAfter worker's death Libya's largest oil field shut down

By Ken Hanly     Jun 8, 2017 in Business
Sharara, the largest oil field in Libya shut down due to a worker's protest. The workers are protesting the death of a colleague according to a source who could not be identified as he she was not authorized to speak to the media.
The stoppage reduces Libya's output by about 270,000 barrels a day. The shut down is a setback for National Oil Corporation(NOC) head Mustafa Sanallah who had just claimed that Libyan oil production had just reached 808,000 barrels a day. He also said that the NOC expected that number to rise to more than one and a quarter million barrels per day by the end of 2017.
The recent output was at its highest since October 2014 when 850,000 barrels per day were pumped. The increases in Libyan production as well as Nigeria are causing problems for the Organization of Petroleum Exporting Countries(OPEC) that are trying to keep prices up and production down. Cuts were extended after a meeting on May 25 in Vienna.
In spite of the shutdown, oil prices dropped more than 5 percent after the US government reported an unexpected rise in inventories of both oil and gasoline. Yesterday, June 7 US crude futures fell to $45.72 a barrel the lowest sine May 4. The Shahara shutdown is expected to be only temporary and an NOC official said that force majeure is unlikely to be declared although Sanalla did not answer the phone or reply to text messages seeking information.
Crude had just begun flowing from Sharara in western Libya to the Zawiya refinery in late April this year after being closed for three weeks. Another field El Feel was also re-started in April. Before Gaddafi was overthrown in 2011 Libya pumped up to 1.6 million barrels per day. Libya has the largest oil reserves in Africa. Both Libya and Nigeria are exempt from the OPEC cuts. Libyan production in 2017 has improved significantly from 2016. The US is increasing output and Nigeria as well so the oil glut continues even with Libya's main oil field shut down. Increases in prices has resulted in US oil producers upping production and to some extent negating the OPEC cuts.
UPDATE (June9) Production resumed today: "Libya’s Sharara Oil Field resumed production on Friday after two days of closure due to protests".
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