Libya's eastern government says all oilfields to close

By Ayman Werfali

BENGHAZI (Reuters) -Oilfields in eastern Libya that account for almost all the country's production will be closed and production and exports halted, the eastern-based administration said on Monday, after a flare-up in tension over the leadership of the central bank.

There was no confirmation from the country's internationally recognised government in Tripoli or from the National Oil Corp (NOC), which controls the country's oil resources.

NOC subsidiary Waha Oil Company, however, said it planned to gradually reduce output and warned of a complete halt to Libya's production, citing unspecified "protests and pressures".

Another subsidiary Sirte Oil Company also said it would cut output, calling on authorities to "intervene to maintain production levels".

Nearly all of Libya's oilfields are in the east, which is under the control of Khalifa Haftar who leads the Libyan National Army (LNA).

If eastern production is halted, El Feel in southwestern Libya would be the only functioning oilfield, with a capacity of 130,000 bpd.

Overall oil production was about 1.18 million barrels per day in July, according to the Organization of the Petroleum Exporting Countries, citing secondary sources.

The Benghazi government did not specify for how long the oilfields could be closed.

While the Tripoli-based Government of National Unity provided no confirmation, its head Prime Minister Abdulhamid al-Dbeibah said in a statement oilfields should not be allowed to be shut down "under flimsy pretexts".

Two engineers at Messla and Abu Attifel told Reuters on Monday on condition of anonymity that production continued and there had been no orders to halt output.

POWER STRUGGLE

Libya's oil revenues have stoked tension for years in a country that has had little stability since a 2011 NATO-backed uprising. It split in 2014 with eastern and western factions that eventually drew in Russian and Turkish backing.

Tensions have escalated this month after efforts by political factions to oust the Central Bank of Libya (CBL) head Sadiq al-Kabir, with rival armed factions mobilising on each side.

The Tripoli-based CBL said on Monday that it had suspended its services at home and abroad "due to exceptional disturbance".

The central bank is the only internationally recognised depository for Libyan oil revenue, which provides vital economic income for the country.

"The Central Bank of Libya hopes that its ongoing efforts in cooperation with all relevant authorities will allow it to resume its normal activity without further delay," it said in a statement.

It temporarily shut down all operations last week after a senior bank official was kidnapped but resumed operations the next day after the official was released.

Protests have previously disrupted oil output.

The NOC declared force majeure earlier this month at one of the country's largest oilfields, Sharara, located in Libya's southwest with a capacity of 300,000 bpd, due to protests. The force majeure is still in force.

Waha, which operates a joint venture with TotalEnergies and ConocoPhillips, has production capacity of about 300,000 barrels per day (bpd) which is exported through the eastern port of Es Sider.

It operates five main fields in the southeast including Waha which produces more than 100,000 bpd as well as Gallo, Al-Fargh, Al-Samah and Al-Dhahra.

TotalEnergies and ConocoPhillips did not immediately respond to a request for comment.

(Reporting by Ayman Werfali; writing by Nayera Abdallah, editing by Michael Georgy, Jason Neely and Barbara Lewis)