Oil Ministry plans to split NOC in two; “unlikely” to placate Benghazi

Oil refinery in Brega. The NOC’s refining activities would be headquartered from Benghazi under the proposal.

The Ministry of Oil is proposing to separate the National Oil Corporation’s exploration and production activities from refining, establishing two separate bodies to be respectively headquartered in Tripoli and Benghazi.

The initiative comes a little under two months after a plan to give Benghazi effective responsibility for exploration, production and refining services in eastern Libya was put on hold following protests in Tripoli.

It is believed that the revised proposal is designed to placate oil workers and activists in eastern Libya who want Benghazi to have a greater say in the running of the country’s oil industry.

“In the oil and gas ministry, we have a near-term plan with respect to the [eastern] region,” new Oil Minister Abdelbari Al-Arusi said in a statement on the NOC’s website.

“[The body] will be called the ‘National Corporation for Oil Refining and Petrochemicals Industry’ and will oversee all companies operating in this area. It will launch projects and secure funding for them.”

In Tripoli would be headquartered the ‘National Corporation for the Exploration and Production of Oil and Gas’. The two departments would also have branches in Tripoli and Benghazi respectively, and would be under the Ministry of Oil.

According to the head of the NOC’s oilfield services arm, however, the proposal is unlikely to placate eastern discontent as currently conceived.

“I don’t think Benghazi will accept it”, Mohammed Albadaly, CEO of Jowfe, told the Libya Herald. “They want exploration and production, not refining. There are far fewer commercial activities in downstream, whereas upstream you have drilling, exploration, production, pipelines and so on”.

Albadaly said that the proposal would more likely be accepted by Benghazi if reversed, to give exploration and production responsibility to the east and leave refining in Tripoli, but that fierce resistance is likely to be encountered in the capital either way.

“A lot of the NOC’s employees are older; they have families and they have roots. They don’t want to move and they don’t want to lose their jobs. That’s why there was so much resistance to Decree 100”.

Under Decree 100, the proposal that was previously shelved, the NOC’s hitherto inconsequential Benghazi branch would have been given de factocontrol over the oil industry in eastern Libya, home to some 80 per cent of the country’s oil fields.

Five departments were to have been established, in the fields of petro-chemicals and refining, exploration and production, human resources, administration and finance. Having only been signed off on 4 October, NOC Resolution 100 was in force for less than a week before being suspended in the face of fierce opposition from staff in Tripoli.

Speaking to the Reuters news agency, Deputy Oil Minister Omar Shakmak described the latest plan as “a matter of reorganisation. We will receive feedback from experts within the oil sector and civil organisations … and upon that, a proposal will be submitted to the government,” he said.

Source: Libya Herald

Canoel Announces Expansion Into Libya

Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE:CIL) is pleased to announce that it is opening a representative office in Libya and is processing the opening of a local company registered under local Libyan laws.

Canoel has identified Libya as a country in which it will in the future seek to identify opportunities to conduct business and purchase exploration or production assets.

In Africa, Canoel already owns a small stake in Mafula Energy Ltd., a Zambia registered company, which has been awarded an exploration permit.

Andrea Cattaneo, the company's CEO, states "We are excited to start a settlement into Libya. We trust that this fast developing country will be a promising area where to deploy our exploration and & production skills."

Canoel's business plan is to grow through international acquisitions and exploration and to increase the production and reserves from its international inventory of oil and gas projects.

Libya's 2012 total oil and gas revenues are expected to be $54.9 Billion US Dollars.

(source: Libyan National Oil Corporation, NOC)

Earnings from oil exports account for more than 90% of Libya's National Income.

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

Azerbaijan Offers to Build Refinery, Filling Stations in Libya

Azerbaijan has proposed building an oil refinery and gasoline filling stations in Libya, the Azeri Foreign Ministry said in an e-mailed statement today.

Azerbaijan could build the refinery on its own or with Libya, Azeri Ambassador Agasalim Shukurov said at a meeting with Abdulrahman Ben Yezza, Libya’s oil and gas minister, according to the statement. State Oil Co. (ATPG) of Azerbaijan, known as Socar, is building a refinery in Turkey’s Izmir region. It also has filling stations in Azerbaijan, Ukraine and Georgia.

By Zulfugar Agayev from Bloomberg