Libya's NOC lifts force majeure, exports set to rise

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

NOC had declared the force majeure on April 20 after its 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 had 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 reports.

However, Libyan production is now expected to increase, having fallen below 1 million barrels per day since last week.

Libya flagship Es Sider is a light sweet crude, comparable to North Sea crudes.

The force majeure helped bolster the Brent market, with June/July backwardation widening out to around $0.70/b last week, while on Monday Quantum reported the Brent/Dubai spread – a measure of light sweet vs medium sour crude – at a one-year high of over $3/b.

In late afternoon trading in London (1545 GMT) Brent futures for June were trading $0.85/b lower on the day at $65.26/b, while the June/July spread was at $0.65/b.