Libya’s oil company halts production as crisis gets worse

As the political crisis in Libya deepens, the country’s National Oil Co. halted production at its petroleum fields and cut off shipments from its ports, rattling regional oil markets.

The NOC declared a “force majeure” to inform customers that orders could not be fulfilled because of unforeseen circumstances.

The cutoff derives from the continuing conflict between Libya’s two rival political factions over control of the central bank and oil revenue.

Oil prices rose on Monday, recovering some losses from late last week, amid the halt in Libyan exports and concerns about the coming decision on OPEC+ production levels.

The political crisis involves a struggle for power between the eastern government, led by commander Khalifa Haftar’s Libyan National Army, and the internationally recognized western government in Tripoli, led by Prime Minister Abdulhamid Dbeibeh.

The NOC reported a 63% drop in oil production last week due to the shutdown, which began Aug. 26. Output was estimated at 591,000 barrels per day, down from 1.2 million barrels in late July.

ADNOC dealmaking goes straight to top amid Covestro negotiations

The decision by the UAE’s national oil company ADNOC to move from operating simply as a domestic oil producer to taking the reins as an international dealmaker comes straight from the top – and progress this week on a $12.5 billion takeover of German chemicals giant Covestro may burnish its reputation.  

UAE President Sheikh Mohamed bin Zayed chaired a 2022 board meeting where he approved a $150 billion five-year capital spending plan to transition the company from a traditional state oil firm into a diversified, multinational energy company. 

When the Covestro deal appeared to stall in recent months, ADNOC raised its bid after seeking approval from MBZ, Bloomberg reports. The negotiations took place against a backdrop of accelerating deal activity at ADNOC and its alternative energy company, Masdar, in which it owns a 33% stake. 

Now Masdar finds itself in a bidding war to acquire Spanish renewables firm Saeta Yield from Brookfield. In the past year it has bought a renewable energy company in Greece and announced a deal to purchase a 50% stake in Terra-Gen, one of the largest private renewable energy producers in the U.S.

The ink dries on these agreements as ADNOC is boosting production capacity and Masdar is looking to develop or acquire an energy portfolio of at least 100 GW capacity by 2030.