UPDATE 1-Libya's El Sharara oilfield won't reopen until occupiers leave - NOC

Libya's biggest oilfield El Sharara will remain shut until an armed group and protesters occupying the site leave, the head of the National Oil Corp (NOC) said on Tuesday, more than a month after the field was closed because of a protest. The oilfield with a capacity to produce 340,000 barrels per day (bpd) has been under force majeure since December. Libya now produces more than 900,000 bpd, below average production in 2018 of 1.1 mln bpd, NOC Chairman Mustafa Sanalla said in London.

"The armed group attempting to hold NOC and Libya’s economic recovery to ransom must leave the field before NOC will consider restarting production," Sanalla told a Chatham House conference. Libya's oil industry has faced disruption since 2011 when the nation plunged into conflict that led to rival power centres in west and east. Protesters and armed groups have often targeted oilfields and energy infrastructure.

General Khalifa Haftar's Libyan National Army (LNA), which is based in east Libya, launched a campaign this month in southwest Libya that it says aimed to combat militant groups and secure oil facilities in the area, including El Sharara. NOC is based in the capital Tripoli, in the west and home to the internationally recognised government.

Referring to the LNA initiative, Sanalla said the effort to restart the field "has been complicated further by the launch of an international counter-terrorism mission which has expanded into an attempt to seize control of territory, including potentially, national oil infrastructure." "It is my concern that a sequence of events has been set in motion with unknowable consequences for Libya, and NOC," he said.

He said the preferred solution for securing the field involved deploying a Petroleum Facilities Guards (PFG) force, managed by NOC, adding that NOC would adopt this option with "some reluctance". Different factions of the PFG have previously been responsible for shutdowns at oil facilities in the country.

He said NOC has suggested that, as an immediate measure, "a mixed force might provide a solution within a negotiated security framework" led by the Government of National Accord in Tripoli and with the support of the United Nations. (Reporting by Ahmad Ghaddar Editing by Louise Heavens and Edmund Blair)