Libya’s NOC shuts Zawiya refinery unit due to forced pipeline closure

Libya's National Oil Company (NOC) has announced a financial loss of approximately $95 million due to the shutdown of one of its refineries at the Zawiya site. The closure comes as armed groups affiliated with the Western South Oil Facilities Guard Agency and Western Military Zone continue to keep the valve for the Sharara crude transmission line shut.

This has led to a significant reduction in crude production, totaling over 942,000 barrels for the week, with losses peaking at nearly 260,000 barrels on a single day. The NOC forcibly shut down a refining unit at Zawiya to protect the other unit, which produces various petroleum products for domestic use. Zawiya, Libya's largest operating refinery, boasts a capacity of 120,000 barrels per day and also serves as a hub for asphalt and lubricant production.

The site's importance extends to its connection with the Sharara field through a pipeline, which facilitates both domestic supply and export of crude oil. NOC has expressed concern over the impact of these disruptions on government finances and the overall economy, warning that they will negatively affect oil revenues and double the import bill for petroleum products.

The company is taking precautionary measures to ensure the refinery's continued operation by programming a shipment of crude oil through a port. Despite ongoing challenges such as political instability and violence since the overthrow of former leader Muammar Qaddafi in 2011, Libya remains a major player in the global oil market with the world's 10th-largest proven oil reserves and the largest in Africa.

However, the country requires substantial investments, estimated at up to $40 billion, to develop its oil and gas sector and achieve self-sufficiency.