FINANCIAL TIMES: Libyan PM wooing US oil companies: “Several big international companies including ExxonMobil, BP, Royal Dutch/Shell and Total, which had been operating in Libya during the 18 years of US economic sanctions against the North African country, did not win any licences under the latest auction.” (ShellNews.net) 1 Feb 05
By Kevin Morrison in Vienna
Published: February 1 2005
Libya hopes to entice the losers in last week's landmark oil exploration auction back to the bargaining table by offering 40 new permits next month, Shukri Mohamed Ghanem, the Libyan prime minister, said yesterday.
ChevronTexaco was the only large listed oil company to emerge with an exploration licence in last week's permit auction, the first since US economic sanctions were lifted last year.
Mr Ghanem said executives from the Libya National Oil Corporation were working on the auction of afurther 40 licences, expected to be launched in the next two months.
"We hope [the major listed oil companies] are all successful next time," said Mr Ghanem, who was in Vienna attending the policy meeting of the Organisation of the Petroleum Exporting Countries.
The opening of Libya's oil and gas sector to greater foreign investment has been swift since the US lifted sanctions last year after Libya paid compensation to the families of those killed in the 1988 Lockerbie bombing and a made a commitment to end its development of weapons of mass destruction.
Several big international companies including ExxonMobil, BP, Royal Dutch/Shell and Total, which had been operating in Libya during the 18 years of US economic sanctions against the North African country, did not win any licences under the latest auction. New permits were awarded mainly to US companies, with Occidental Petroleum securing nine licences.
Mr Ghanem denied any bias towards US companies, particularly Occidental, which along with Amerada Hess formed the quartet of US companies operating in Libya before they quit the country when President Ronald Reagan imposed sanctions in 1986. "Oxy [Occidental] had the best bids, and the company that has the best bid wins," he said.
The prime minister also said the government was close to signing an agreement with Occidental and the Oasis Group consortium, comprising ConocoPhilips, Marathon Oil and Amerada, about the return of the oil production concessions the US oil companies had surrendered when they left Libya in 1986.
"We have an agreement in principle, but there are still a few details to iron out, because we still have to work out such things as compensation to Libya for the money we have spent on maintaining these fields for all this time," Mr Ghanem said.
Oasis production peaked in 1969 at over 1m barrels a day, and declined to 400,000 b/d in 1986 when the concessions were taken over by Libya's National Oil Corporation.
Libya's rapid opening of its energy sector is in contrast to its neighbour and fellow Opec member Algeria, which proposed a reform of its energy sector in late 2001 that has yet to be turned into law. T he Algiers government says that situation will change this year with the new hydrocarbon bill that goes before parliament this month.
Libya produces about 1.5m b/d and hopes to raise this to 2m b/d by the end of the year, rising to 3m b/d by the end of the decade with the help of increased foreign investment.