June 29, 2018 / 5:00 PM / 21 days ago

UPDATE 1-Libya's NOC sees force majeure at Zueitina and Hariga oil export ports

(Adds detail, background)

TUNIS, June 29 (Reuters) - Libya’s National Oil Corporation (NOC) said on Friday it expects to declare force majeure on loadings from the eastern ports of Zueitina and Hariga from July 1, raising losses in output from a power struggle over oil exports to 800,000 bpd.

“This step will have to be taken due to insufficient storage capacity, and because the Libyan National Army (LNA) General Command has prevented legitimate allocations being loaded by blocking vessel entry to ports,” the Tripoli-based NOC said in a statement.

The move would cause an additional output cut of 350,000 barrels per day (bpd), increasing total losses from disruption at eastern ports to 800,000 bpd, or $60 million in daily revenue, the NOC said.

Earlier this month fighting between the LNA and rival factions shut down the ports of Ras Lanuf and Es Sider, reducing production by around 450,000 bpd.

After the LNA regained those two terminals it announced it would hand control of all eastern ports and oilfields to a parallel NOC based in the eastern city of Benghazi, raising the prospect of prolonged disruption to Libya’s national production, which was previously more than one million bpd.

NOC Benghazi said it was ordering port workers not to load tankers that it had not authorised, holding up loadings booked by NOC Tripoli at Zueitina and Hariga from Thursday.

The NOC in Tripoli, which is internationally recognised under U.N. Security Council resolutions, said blockages at the ports may force the Sarir refinery to cease operations, which would restrict local fuel supplies.

It said that eastern-based NOC subsidiaries, Arabian Gulf Oil Company (AGOCO) and Zueitina Oil Co, had taken steps to limit any pipeline damage that could result from limited storage capacity.

“NOC calls upon the LNA General Command, alongside whom it has previously worked in the national interest, to end the blockade,” the NOC statement said.

“The impact of the on-going standoff to the national deficit is considerable and unsustainable.”

Reporting by Aidan Lewis Editing by Edmund Blair and Louise Heavens

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