Shadow of political instability lingers on Libya’s oil industry

TRIPOLI: The temporary closure of Libya’s largest oilfield this month following protests underlines the lingering shadow of political instability on the North African country’s embattled oil and gas industry. The Sharara oilfield, with a capacity of 300,000 barrels per day, resumed production on Sunday. The oilfield was shut down on Jan 7 following protests by residents demanding better infrastructure and economic opportunities.

Libya’s state-owned National Oil Corporation (NOC) announced the resumption of operations at the facility on Sunday. The field represents roughly a fourth of the country’s total output of about 1.2 million barrels per day. Such protests, which target the country’s vital oil infrastructure, may affect the OPEC member’s ability to meet its lofty production target and grow its gross domestic product over the next few years, according to analysts. Despite having Africa’s largest crude reserves, a third of Libya’s population lives below the poverty line and parts of the country suffer chronic shortages of petrol and gas due to inadequate investment in pipelines and refining capabilities.

Last week, the country’s oil minister said that the continued shutdown of the key oilfield could potentially impact the nation’s GDP and undermine Libya’s reputation as a reliable energy supplier. “We believed the country had achieved stability, and customers had confidence in receiving consistent oil quantities. Losing customers is a real risk, jeopardizing the future for everyone,” Mohamed Oun told reporters at an event in Tripoli.

“It’s crucial for people in Libya to understand that the NOC and the ministry of oil and gas are primarily focused on oil and gas exploration, extraction, production, and contributing revenue to the country’s state treasury,” he said. The last time Libya suffered a major supply disruption was in 2022.

Libya has remained divided since the civil war that