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Libya, the holder of Africas largest crude reserves, halted exports from two of its biggest oil ports as rival forces battled to control the nations main revenue source.

National Oil Corp, the state-run oil company, declared force majeure at Es Sider and Ras Lanuf, Libyas largest and third-largest oil ports, with a combined capacity of 560,000 barrels a day. Force majeure is a legal status that protects a company from liability when it cant fulfill a contract for reasons beyond its control.

National Oil spokesman Mohamed Elharari said the ports werent damaged and that the fighting occured at some distance from both facilities. The nations output dropped signicantly, he said, without giving an estimate.

Two officials with knowledge of production operations said Libya was producing about 350,000 barrels a day over the past 24 hours, compared with 800,000 barrels a day before the fighting broke out on Dec. 13. The officials asked not to be identified because they arent authorized to speak to the media.

Libya is divided after its internationally recognized government, led by Abdullah al-Thinni, sought refuge in the countrys eastern region after Islamist militias took over Tripoli about four months ago. Omar al-Hassi set up a rival government in the capital with the backing of the militants.

Thinni announced plans last week to assert his governments control of oil payments made by foreign companies, prompting the Islamist forces backing his rival to try to seize the eastern oil terminals protected by the Petroleum Facilities Guard.

Its an important decline, but I cant say how much, Elharari, speaking by phone from Tripoli, said of the drop in production. The terminals were closed as a precaution to preserve the lives of the workers; the shutdown of the ports was done in an orderly, professional way to preserve the equipment.

Brent crude, a pricing benchmark for more than half of the worlds oil, added 84 cents to $62.69 a barrel on the ICE Futures Europe exchange in London at 12:34 p.m. local time. The contract closed on Dec. 12 at the lowest level since July 2009.

National Oil, or NOC, is determined to protect the oil resources of the country in a way that protects the rights of the country and the partners in line with terms of the partnership agreements, according to a Dec. 13 statement posted on the companys website declaring the force majeure.

A spokesman for the Petroleum Facilities Guard, a force loyal to Thinnis government, said Islamist militias attempted to invade the terminal over the weekend and were repulsed. They suffered heavy losses, the spokesman, Ali Al-Hasy, said by phone from Es Sider, reporting no casualties on the PFG side. It is relatively quiet now.

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Libya Imposes Force Majeure on 2 Oil Ports After Clashes

The flow of crude oil to and from Libyas two biggest oil terminals slowed to a trickle Monday after fighting between militias intensified in the turbulent North African countrys energy-rich east.

Even before the latest outbreak of strife, the Libyan state had teetered on the brink of collapse. Months of fighting between militias loyal to two competing governments one in the capital, Tripoli, and one in the eastern city of Tobruk has largely resulted in a standoff.

The United Nations has been trying to broker an accord between the factions, and a second round of talks was to take place this week. But the fresh fighting was likely to cloud that effort.

Over the weekend, militias allied with the Islamist-leaning Libyan Dawn movement, which controls Tripoli and much of the countrys west, attacked the two oil facilities, confronting forces loyal to the internationally recognized Tobruk-based government. The Libyan Dawn ground advance drew retaliatory airstrikes near the contested terminals, and Libyan news reports said at least five people died in the fighting.

Oil officials said only minimal staff remained at the Ras Lanuf and Sidra terminals southwest of Benghazi after the declaration Sunday of a state of force majeure, a legal designation that allows the state-run National Oil Co. to renege on its international commercial commitments. Together, the two terminals account for more than half of Libyas output of crude oil.

The country has been swept by turmoil since the 2011 ouster of Moammar Kadafi amid the regionwide uprisings known collectively as the Arab Spring. Armed groups that worked toward the common goal of overthrowing the longtime dictator swiftly turned on one another, carving up the country into what amount to fiefdoms.

In the interim, regional powers have thrown their weight behind armed factions competing for political influence and oil wealth. Neighboring Egypt and economic powerhouses such as the United Arab Emirates support the Tobruk administration, while wealthy Qatar has lent support to Islamist armed factions that overran the capital in August and sought to reinstate a parliament whose mandate had expired.

Energy production has long been the linchpin of Libyas economy, which has been battered by continuing unrest and more recently by plummeting oil prices.

Libyas main eastern oil ports had reopened only over the summer after a separate power bid by an eastern-based militia leader who shut them down for nearly a year as he sought to wrest a greater share of oil revenue from the then-government in Tripoli.

In addition to the struggle for eastern oil ports, confrontations have erupted near Libyas western border with Tunisia. Despite the fighting, foreign laborers have continued to enter and exit Libya from the Ras Ajdir crossing with Tunisia, and Egypts Foreign Ministry warned its nationals to avoid the area after two Egyptians were reported killed Sunday.

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Fighting in Libya curbs flow at major oil terminals

Biggest oil export port shut due to clashes in Libya
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Abdullah al-Thinni, who is recognised outside of Libya as the legitimate prime minister, retreated from the capital Tripoli and relocated his government into eastern Libya, after an Islamist-dominated group known as Libya Dawn seized Tripoli in August and set up its own administration.

In an attempt to minimise losses, Libya's National Oil Corporation invoked a contractual clause known as "force majeure", by which they were not forced to compensate their clients for the closure of Es Sider. They also called on the rival fighting factions to spare the country's energy infrastructure.

But for the rival governments, Libya's oil reserves are a key prize, not collateral damage.

On Saturday, Libya Dawn the newest of the Middle East's self-proclaimed revolutionary movements said it had launched an operation to "liberate oilfields and terminals".

Days earlier, Mr Thinni had said his government wanted to consolidate control over oil revenues by setting up a payment system which would bypass its political rivals in Tripoli.

Libya's oil reserves are among the biggest in the world, and production has repeatedly been affected by spasms of violence. Es Sider had only recently reopened after a one-year interruption which ended when rebels occupying the port struck a deal with the central government.

The question of who owns Libya's oil reserves is key to foreign buyers, most hailing from Europe and China.

Libya's energy industry had seen a modest recovery from a wave of protests until last month, when the southern El Sharara oilfield, one of Libya's largest, ceased production due to clashes and a pipeline closure.

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