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.

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 decides to invest $10 bln to develop oilfields

Libya’s General People’s Committee decided on 09/09/2009 to invest 12.1 billion dinars ($9.92 billion) to develop and maintain 24 oil wells the government described as "technically, financially and economically proven productive fields", the cash will be borrowed from local banks and local Libyan or JV companies would only take part in the scheme.

It will include main oilfields among the 24 wells involved in the development programme such as Waha-Jalou North field which would see its production capacity up by 100,000 barrels per day (bpd) with a total investment of 1.6 billion dinars.

And Nafoura-Oujlaa-Khleej field to increase it to 130,000 bpd of output capacity with a total investment of 1.3 billion dinars.

NOC is tasked with carrying out a study of 13 other fields to find out whether they would be included in another development plan.

Libya has the largest proven oil reserves in Africa, set at 41.5 billion barrels and Europe’s single biggest oil supplier. Libya, an OPEC member, produces about 1.8 million bpd of oil and hoping to increase its daily production to 3 million bpd by 2015.

Source: Reuters, GPC and Sahra Oil Consultancy Ltd

ExxonMobil Commences Drilling Libya's First Deepwater Well

Exploration Company announced today that its affiliate, ExxonMobil Libya Limited, has started drilling the first deepwater exploration well in Libya. The A1-20/3 well is being drilled in Contract Area 20 (CA 20) located offshore in the Sirte Basin, northeast of the city of Misrata, in the Libyan Mediterranean Sea.
The rig, contracted from Noble Africa Limited and named the Noble Homer Ferrington, is capable of operating in water depths up to 7,200 feet (2,195 meters), and can drill to a depth of 30,000 feet (9,144 meters). It is designed for high efficiency and safety, and is able to operate in many global deepwater environments.

Phil Goss, President of ExxonMobil Libya Limited, said, “ExxonMobil has a long and successful history of working in Libya, where we previously operated as Esso and Mobil.

“We are pleased to start drilling our first deepwater exploration well in Libya based on the rigorous technical work conducted by our Libyan National and expatriate scientists, and in collaboration with the National Oil Corporation (NOC) to progress our exploration program.”
ExxonMobil has an unwavering commitment to operations safety and integrity and to protecting the environment. These core values are embedded in the way we work and implemented globally through our management systems. ExxonMobil has a proven track record of operating to the highest industry standards in all aspects of our business.

Elsewhere in Libya, ExxonMobil Libya Limited has completed two 3D seismic surveys in offshore Contract Areas 20 and 21, and three 2D seismic surveys in offshore Contract Areas 44, 20, and 21.

Two new oil & gas discoveries in Libya

The Libyan state-owned National Oil Corporation (NOC) has reported two new oil and natural gas discoveries - one with Algerian partner Sonatrach in the Ghadames basin and the other with Spanish partners Repsol YPF SA and OMV AG in the Sirte basin.

NOC said Sonatrach made the first discovery on Block 65 in the Ghadames basin with the wildcat A1-65/02 well. The well was drilled to 9,033 ft TD about 230 km south of Tripoli, encountered both oil and gas in the Mamouniyat formation at intervals of 8,532 and 8,560 ft.
Testing of the wildcat showed oil of 48.8° gravity flowing at 1,344 b/d and gas flowing at 1.88 MMcfd through a 28/64-in. choke, NOC said.

NOC holds a 75% stake in the Block 65 license, while Sonatrach holds the remaining 25% stake, which it acquired in 2005.

NOC's second reported discovery, in the Sirte basin about 500 km east of Tripoli, was with the A1-NC202 wildcat, drilled to 15,815 ft TD in 50 m of water.

NOC said the A1-NC202 discovery found both oil and gas in the Demah formation at intervals of 4,442 and 4,484 ft. Testing of the well showed 26° gravity oil flowing at 1,264 b/d and gas flowing at 0.58 MMcfd through a 32/64-in. choke.

Repsol YPF operates the NC202 Block, which was awarded in 2003. Repsol YPF holds 21% interest, while NOC has a 65% stake, and OMV holds the remaining 14%.