Libya’s state-owned National Oil Corp. said it was against paying a ransom to an armed group that halted crude production at El Sharara, the North African country’s largest oil field.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
The NOC on Dec. 10 declared force majeure on exports from the 315,000-barrels-per-day (bbl/d) oil field located in the south of the country. The field was seized during the weekend by a local militia group.
The nearby El-Feel oil field, which uses the same power supply as El Sharara, was still producing, a field engineer said. NOC could not be immediately reached for comment. El-Feel usually pumps around 70,000 bbl/d.
Libya has faced since 2013 a wave of blockages of oil fields and export terminals by armed groups and civilians trying to press the weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Dec. 8, protesters and oil workers said. The protesters work in shifts, with some going home at night.
The NOC has evacuated some staff by plane, engineers said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger over high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.