Repsol 'closing in' for Libya drill

Spanish oil company Repsol is reported to be making final preparations to resume exploration drilling in Libya in early 2013, adding to signs that the Opec member's key industry is returning to normal after the 2011 civil war.

"We have ordered a new drilling rig and we will start as soon as that arrives, probably early next year," said a Repsol executive on the sidelines of the North Africa Oil & Gas conference, according to Reuters.

A Repsol spokesman said the first drilling would be in the east Libyan desert and added that production was now close to the 350,000 barrels per day the company was pumping before the war.

While the North African country has impressed analysts by ramping up production more quickly than expected to around 1.6 million barrels per day, it has so far had only limited success in luring back security-conscious foreign companies to carry out exploration work, despite its estimated 47 billion barrels of proven oil reserves.

A deadly attack on the US consulate in the eastern city of Benghazi in September is widely seen as acting as a further deterrent, especially for US players.

The relative caution of international oil companies contrasts with the speed with which Libyan oil workers resumed work, sometimes even before the end of the conflict.

The slow return of companies could hamper the ability of Africa's third largest oil producer to raise future output, according to the chairman of Zueitina Oil, which works alongside US company Occidental Petroleum.

"Some of them have lifted their force majeures but when it comes to actual work we have heard nothing," said Abdul Nasser Fituri Zammit, adding that the absence of construction and oil services companies was slowing down projects.

Libyan oil executives are hoping the Repsol decision as well as a commitment by BP to resume exploration will encourage others to return.

"Exploration is still much less than before the war. I hope the companies will be back early next year. Now it's being done by (Algeria's) Sonatrach and NOC [National Oil Corporation]," said a source at the Libyan Oil Ministry.

He added that local oil companies linked to NOC had "four or five" seismic teams in the desert and had begun drilling.

An executive with Polish company PGNiG also said at the conference there were plans to drill three wells in Libya next year.