Libya crude exports threatened after militia storms major oilfield

The country's National Oil Company (NOC) declared force majeure on exports from the El-Sharara field, resulting in a production loss of 315,000 barrels per day and an additional loss of 73,000 bpd at the El Feel site, Reuters reported.

Armed militia stormed El-Sharara on Saturday after some guards and locals claiming to be attached to the guard force had opened the gates. Often friends or relatives of the guards block oilfields in an attempt to get added to the state payroll.

Members of the groups stayed overnight in the area, the NOC said, in apparent protest against authorities who did not provide more funds and development support for their impoverished region.

Such shutdowns are often resolved by paying the guards or locals to leave the site, but the current situation could be drawn out as local tribesman have demanded money for hospitals and other state services, Reuters said.

"NOC demands that the group leave the oilfield immediately without pre-condition," the statement from the state oil company said. It said it was "reviewing" evacuation plans but did not say whether staff had actually left the site.

NOC said in a statement on Sunday that it "will not take part in negotiations with the militia or is willing to compromise following their decision to revert to violence, insulting language, and theft".

Production at the Zawiya refinery was also at risk due to its reliance on crude oil from Sharara, the company said.

Libya's economy relies heavily on oil, with production at 1.6 million barrels per day under former dictator Muammar Gaddafi.

Gaddafi's 2011 ouster saw production fall to about 20 percent of that level, before recovering to more than one million barrels per day by the end of 2017.

Libya is divided and run by two weak rival governments, with anger about high inflation and a lack of infrastructure taken out on the NOC, which Libyans see as a cash cow booking billions of dollars in annual oil and gas revenues.