Libya national oil company declares force majeure

TRIPOLI, Aug 21, 2013 (AFP)

Libya’s National Oil Company declared force majeure at its main export terminals on Wednesday, as striking security guards kept up a blockade they launched in late July.

The move marked a major blow to an industry that accounts for virtually all of the North African nation’s foreign exchange earnings.

The government is locked in a stand-off with striking security guards, whom it accuses of trying to sell oil on the black market amid a persistent dispute over alleged corruption in oil shipments.

“Because of protests by some oil installation guards causing the closure of the terminals at Zueitina, Ras Lanouf, Al-Sedra and Brega (in the east) and leading to the inability to honour its commitments, the NOC decided to declare force majeure in these ports,” the company said in a statement on its website.

Force majeure exonerates the NOC from its responsibilities in case it breaches contracts to supply oil, if it invokes exceptional circumstances.

The government, in open conflict with the striking guards, threatened on August 15 to use force to stop the sale of any crude that did not pass though official channels.

The guards, however, accuse the authorities of corruptly selling crude in excess of documented cargoes.

The NOC said that all its transactions were regular, while the government has set up a panel of judges to investigate the guards’ allegations.

Libya’s main oil terminals have been hit by strikes since late July that caused production to plummet to less than 330,000 barrels per day before rising again to 670,000 bpd.

Even that figure fell short of the 1.6 million bpd averaged before the 2011 overthrow and killing of veteran dictator Moamer Kadhafi.

Libya is almost entirely dependent on oil and gas for its foreign exchange earnings, with hydrocarbons accounting for more than 80 percent of its GNP and up to 97 percent of its exports.

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