Libya's National Oil Corporation (NOC) is weighing whether to declare force majeure on exports from the Zawiya oil terminal following a series of drone attacks on the facility, Reuters reported. A force majeure declaration would legally allow NOC to suspend its export delivery commitments, signaling to buyers and partners that circumstances beyond the company's control have disrupted operations.

The Zawiya terminal handles approximately 120,000 barrels per day and is supplied by the Sharara oil field, Libya's largest, which has a production capacity of up to 300,000 barrels per day. The Sharara field itself has been repeatedly forced offline in recent years by armed blockades and protests, making the current attacks part of a broader pattern of disruption to Libya's most productive assets.

According to reports, a drone strike destroyed a storage tank at the terminal that contained 4.5 million liters of gasoline. A separate drone targeted an oil blending facility at the same site. The loss of both the tank and its fuel contents risks intensifying local fuel shortages.

This marks the third drone attack on the oil terminal in recent days. Over the weekend, a drone crashed into a naphtha tank at the Zawiya refinery, causing a leak that was subsequently contained, Reuters reported. No group has been identified as responsible for the attacks. Libya's oil infrastructure is frequently targeted by factions seeking political leverage in the country's ongoing power struggles, and NOC has invoked force majeure at various facilities during previous waves of conflict.

Despite the persistent security challenges, NOC remains optimistic about expanding Libya's oil output. The state-owned company has signaled confidence that it can raise national production from the current 1.4 million barrels per day to 2 million barrels per day by the early 2030s — a level last seen before the 2011 civil war that toppled Muammar Gaddafi and plunged the country into prolonged instability.

That target follows a much-needed budget allocation of approximately $2 billion from the latest Libyan budget. NOC Chief Executive Masoud Suleman told Bloomberg earlier this month that the funds will serve as an operating budget. "The era of delayed funding, which used to cause problems and concerns, both for us and our partners, is now behind us," Suleman said.

In a further sign of Libya's push to revitalize its energy sector, NOC and Austrian energy firm OMV declared the Essar oil discovery commercially viable last month. The announcement came as OPEC's second-largest African producer seeks to rebuild its industry through partnerships with international oil majors.

Source: OilPrice.com | Reuters