Verenex, Libya aiming to meet deal deadline

Verenex Energy Inc. and Libya are hoping to finalise a deal by Friday to sell the company to a Libyan sovereign wealth fund, but a further delay is not ruled out, sources familiar with the matter said on Wednesday.

The Libyan Investment Authority (LIA) has agreed to pay C$7.09 a share for Verenex, a Canadian oil firm with assets in Libya, in a deal valued at around C$316 million.

Verenex said in an October 20 statement the parties have until November 6 to sign a definitive agreement.

A source with knowledge of the talks said the parties were hoping to finalize the deal by Friday, but did not rule out the prospect of the "outside date" being extended for a second time.

"We're still targeting getting everything done by the 6th," said the source, who declined to be identified because the talks are confidential. "That's the target."

"We are still in negotiations, but I hope we will finalise everything," said a second source.

The Verenex saga highlights the risks for Western investors in Libya, holder of Africa's largest oil reserves. The government blocked a deal by China, which offered to buy Verenex for C$10 a share in February. Libya's sovereign wealth fund later agreed to buy the firm for the lower price.

Some investors in Verenex were sceptical the deal would be tied up by Friday.

"To extend this for another few weeks would be par for the course," said one shareholder. "What's another few weeks when this thing has been dragging on for months?"

Verenex shares, which have risen as high as C$9.74 and fallen as low as C$5.60 this year, closed at C$6.77 on Tuesday.

Shokri Ghanem, head of Libya's National Oil Corp., declined on Wednesday to comment on Verenex. Verenex executives could not be reached for comment on Tuesday.

Libya has attracted a wave of interest including from Western energy companies such as BP Plc, as well as Chinese and Japanese firms, since most international sanctions were lifted in 2004.

Progress in developing new projects has slowed, partly in line with determination across resource-holding countries to maximise their own returns from oil and gas reserves.

Verenex holds promising oil assets in Libya, where it has drilled 21 wells with a 95 percent success rate.

Source: Reuters

Libya's Ghanem not to attend OPEC meeting

According to the latest reports coming in and especially the one coming in from Reuters in which confirms what I have written before about the resignation of Mr. Shokri Ghanem.

Reuters stated that he will not be attending the upcoming OPEC meeting in Vienna and the reason is that he submitted his resignation and still waiting for a reply from the Libya authorities.

The main reason for him to resign according to Reuters is the dispute between Libyan and Verenex (Canadian Company) in which Libya was trying to buy the company and at the same time China was too trying to buy it and it led to Libya refusing to approve the deal for China.

The question now is who is going to replace him?

Sources: Reuters and Sahra Oil Consultancy

Libya hopes Verenex buy will not take long

Libya's plan to buy Verenex Energy Inc should not take long and it is well-placed to finance the deal, the country's most senior energy official said on Thursday.

Libya has said it will exercise its right to pre-empt a friendly C$10-a-share bid for Verenex from China National Petroleum Corp (CNPC) . It has yet to make a formal offer.

"Sometimes it's very difficult to give an exact time-frame, but I hope it will not take long," Shokri Ghanem, the chairman of Libya's National Oil Corporation, told Reuters television.

"Libya has quite a good fund," he said. "Most of the funds are invested in cash and cash is the king now, so I don't think we'll have a big problem regarding finance for this deal."

Verenex holds promising oil assets in Libya, home to Africa's largest oil reserves which has attracted a wave of interest from oil companies after the end of international sanctions.

With the assumption of debt, the C$10 a share offer from CNPC is worth C$499 million, the companies said when it was announced on February 26. The stock was unchanged at C$8.95 as of 1827 GMT.

Ghanem has previously stated that Libya would offer the same price as the C$10-a-share agreed by CNPC. He did not specify a purchase price in his comments on Thursday.

He said Libya had chosen to buy Verenex for commercial reasons.

Source: Reuters