Wintershall's Libya oil output at 70,000 b/d; builds pipeline

Germany's Wintershall is currently producing just over 70,000 b/d of oil in Libya, or around 70% of its output level from before the civil war in the North African country, a senior company official said Monday.

Speaking at a conference in London, Wintershall vice president Klaus Langemann said the company's output was being restricted by infrastructure constraints and that production would rise once a new oil export pipeline in Libya was completed.

"We are at more than 70% of our original production capacity, and we are producing a little beyond 70,000 b/d," Langemann told the conference.

Before the unrest in Libya began in February 2011, Wintershall was producing around 100,000 b/d from its fields in the country. 

Langemann said the company's production facilities suffered no damage during the civil war, and that it was able to boost production up to around 50,000 b/d within a week of the end of the war.

He also said that Libya had asked Wintershall to help build a new export pipeline together with the state-owned NOC and Agoco.

"We acted quickly, and the pipeline is now under construction," Langemann said. "It will be finalized early next year."

This will help the company restore its pre-uprising output, Langemann told Platts later on the sidelines of the conference.

"It's just a question of pipeline infrastructure," he said. "The wells could produce more -- indeed our reservoir engineers told us the shut-in had helped the reservoir 'relax', which is a good thing." 

EXPLORATION EFFORTS

Langemann also said Wintershall was committed to a long-term future in Libya, although he said the company's exploration efforts would depend on the terms offered for new blocks.

"The terms are tough in Libya," he said, referring to the EPSA IV contract system.

"In the last rounds it was shown that companies over-bid," he said.

Libya has Africa's largest oil reserves, estimated at some 47.1 billion barrels, and there is expected to be a concerted effort by international companies to increase exploration with a view to developing the country's resources since the death of former Libyan leader Moammar Qadhafi.

Asked whether Wintershall would take part in any future exploration bidding rounds in Libya, Langemann said: "We wouldn't rule it out." For now, though, Langemann said the political framework for expanding Libya's oil sector was not yet in place.

"The decision-making regime is not there at the moment," he said.

Separately, Langemann also said Wintershall was looking at projects in the UAE, specifically bringing in technology to help Abu Dhabi improve its oil recovery rates.

He said Abu Dhabi currently is short on gas as it reinjects large volumes to help oil production.

"Looking at Abu Dhabi, they are deficient in gas -- we can bring the know-how on enhanced oil recovery to allow them to use gas for the domestic market," Langemann said.

Wintershall signed a memorandum of understanding with the head of the Abu Dhabi National Oil Company (ADNOC) in May 2010 on possible joint exploration and development of a gas and condensate deposit in Abu Dhabi.

Source@ Platts

British Petroleum (BP) to resume operations in Libya

A BP logo is seen on a petrol station in London November 2, 2010.

Credit: Reuters/Suzanne Plunkett

By Hamid Ould Ahmed

BP is to resume exploration activities in Libya that it suspended because of last year's uprising, re-starting a relationship which under ousted Libyan leader Muammar Gaddafi landed the firm in the centre of a political storm.

BP's return is a milestone in the recovery of Libya's energy sector, though this was tempered by an announcement from Royal Dutch Shell (RDSa.L) that it would pull out of fields in Libya on the grounds that they were not worth developing.

BP closed down operations in Libya and withdrew its expatriate workers in February last year, days after protests broke out in eastern Libya which with help from NATO warplanes and missiles eventually forced Gaddafi from power.

The oil firm follows other majors, including Eni (ENI.MI) and Total (TOTF.PA) in restarting Libya operations, despite lingering worries about security and the possibility the new authorities will try to re-negotiate contracts signed under Gaddafi.

The head of Libya's National Oil Corporation, Nuri Berruien, and Michael Daly, BP's executive president for exploration, agreed in Tripoli on Tuesday to lift force majeure, the legal mechanism under which BP suspended its operations last year.

The agreement was a "significant milestone in BP's plans to return to the exploration of onshore and offshore blocks," Daly said in a statement.

BP's then chief executive Tony Hayward travelled to Tripoli in 2007 to sign a $900 million contract giving the company the right to explore onshore and offshore fields in Libya, home of Africa's largest proven crude reserves.

But the deal quickly became entwined in a furious political row about Abdel Basset al-Megrahi, the Libyan convicted of the 1988 bombing of a U.S. airliner over the Scottish town of Lockerbie.

Megrahi died in Tripoli earlier this month, three years after Scottish authorities released him on the grounds he was terminally ill and did not have long to live. He had returned to a hero's welcome in Tripoli.

Megrahi's release caused a storm of anger in the United States, where many of the victims of the Lockerbie bombing were from. The U.S. Senate Foreign Relations Committee launched an inquiry into whether there was any connection between Megrahi's release and BP winning the exploration deal in Libya.

The company and the British government have always denied any connection between the two, although BP did say it lobbied for Megrahi's transfer to Libya.

SECURITY SITUATION 'MANAGEABLE'

Libya now is preparing for its first ever democratic elections, but the new government is weak and struggling to keep in check armed volunteer militias.

A BP spokesman said security was going to be "the determining factor on how quickly we move."

"At the moment we feel security and safety is sufficiently manageable."

It was likely to be months before BP had everything in place to re-start its exploration work, the spokesman said.

"The first thing we need to do is re-establish the contracts for drilling and logistics," he said.

"We need to get contractors back in for the onshore and offshore drilling .. Then it's back to work as soon as possible."

Shell said its decision to pull out of its Libyan contracts did not show any lack of faith in the oil sector, and said it would keep an office open in Libya to look into new deals.

In a statement, the company said it would abandon drilled wells and stop exploration on its two Libyan licenses. It said its departure had nothing to do with security issues and was taken on a purely commercial basis.

"Despite an extensive seismic and drilling campaign in these licenses, results have been disappointing and further exploration cannot be economically justified," a Shell spokesman said. "We have agreed to actively pursue new upstream business opportunities."

Asked about Shell's decision, NOC chief Berruien told Reuters by telephone: "All I can say right now is that Shell is not withdrawing from Libya. They are staying."

Source: Reuters

www.soclibya.com 

Libya resumes offshore exploration-NOC

Libya has resumed offshore exploration for the first time since the end of Muammar Gaddafi’s era, and the work is being carried out at a bloc operated by Italy’s Eni, the National Oil Corporation NOC) said on Monday.

“The National Oil Corporation announces the resumption of exploration activity in the maritime area next to Tripoli at bloc MN41 belonging to Italian company Eni,” said a statement on the NOC website. Arabic version (http://bit.ly/xnqAC4)

The bloc is about 100 km (62.5 miles) from Tripoli, it said.

NOC said on Feb. 27 it was resuming onshore exploration work.