Force majeure declared for Libyan port of Hariga

London (Quantum Commodity Intelliegence) - Libya's state-owned National Oil Corporation (NOC) declared Monday the state of force majeure in the port of Hariga, one of the largest oil ports in the country, according to media reports.

The move comes after NOC subsidiary Arabian Gulf Oil Co., or Agoco, halted output at some of its oil fields, which it blamed on the government's failing to provide federal funds for operations.

This had forced Agoco to reduce its output as it was unable to "fulfill its financial and technical obligations".

Agoco has already reduced output from the 150,000 b/d Sarir and 10,000 b/d el-Bayda fields, and production from the other fields it operates, Hamada, Mesla, Nafoora and Majid, is also likely to be impacted in the coming days, according to reprots.

The NOC said the state of force majeure was declared as a result of the Central Bank of Libya's refusal to liquidate the oil budget for months.

Last year, the former UN-backed government of Libya decided to allocate 1,048 million dinars ($230 million) to the NOC.

Suspension of oil exports at Hariga port could cause daily loses of more than 118 million dinars ($26 million), the NOC said in a statement.

The lack of budget causes debts to some the NOC's companies, resulting in a drop in the daily oil production of about 280,000 barrels per day, it said.

The NOC requested the Office of the Attorney General to "hold accountable all those obstructing NOC's operations, directly or indirectly, and to take the necessary legal actions against those who attempt to jeopardize the capabilities of the country and damage Libya's only source of income." 

Crude exports from Marsa el-Hariga have recently averaged 250,000 b/d.

Libya pumped 1.19 million b/d in March, its highest since June 2013, according to the monthly S&P Global Platts OPEC Survey.

NOC is planning to pump 1.45 million b/d by the end of 2021, as some eastern oil fields resume production.