By Benoit Faucon

A militia has shut over a third of Libya's oil production in a dispute over wage arrears, Libyan oil officials said Tuesday, undermining a recent recovery in the output of the North African nation.

Sharara, a giant oil field in Western Libya, reopened in December after a local militia agreed to reopen pipelines that had been closed for over two years. The resumption drove Libyan production back to about 700,000 barrels a day, partly offsetting production cuts by the Organization of the Petroleum Exporting Countries and its allies.

But the Libyan armed group shut the pipelines again late Monday, along with a connected line to the smaller Wafa field, disrupting production of 250,000 barrels a day, Libyan officials said.

The officials said that they expected the dispute, which is related to delays in paying guards protecting the facilities, to be resolved shortly. Repsol SA (REP.MC) of Spain and Eni SpA (ENI.MI) of Italy who respectively have stakes in Sharara and Wafa, didn't return requests for comment.

Write to Benoit Faucon at benoit.faucon@wsj.com

(END) Dow Jones Newswires

March 28, 2017 08:11 ET (12:11 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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