Libya: no longer a member of the "axis of evil," and armed with a revised petroleum contract, Libya is poised to become a bigger player in oil, gas and LNG production.(International E&P Opportunities)

Publication: Oil and Gas Investor

Publication Date: 01-AUG-04

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2004 Access Intelligence, LLC.

When President Bush lifted many of the U.S. sanctions against Libya in April, he opened the country to investment by American energy companies alter a two-decade absence. Hopes are high that Libya will prove to be a prolific exploration target, but some observers caution that a production spike in Libya is not assured.

Shortly after sanctions were lifted, Tarek M. Hassan-Beck, planning and information technology director for the Libya National Oil Co. (LNOC), gave a briefing at the Offshore Technology Conference in Houston. He gave a glimpse into plans for Libya's upcoming licensing round, in which American companies are free to participate.

Two offshore and six onshore blocks were to be open for bid later this year. No firm date has been announced.

Many changes have been made to the country's energy sector in preparation for the bid round. First, Libya was carved into blocks similar to the grids used in the U.S. Gulf of Mexico mid North Sea. The country's seven basins--both onshore and offshore--are now divided into 250 evenly sized blocks.

Tripoli also recently revised the terms of its exploration and production sharing agreement, reinstated its energy ministry and named a new head of the national oil company.

What size prize?

Libya has proved reserves of 38 billion barrels of oil and 54 trillion cubic feet (Tcf) of gas, Hassan-Beck said. Others say there could be more.

"Since only about 25% of Libya's surface area has been explored to date, mainly using older-generation equipment and techniques, most experts agree that Libya's actual gas reserves are perhaps 70 to 100 Tcf," reports law firm Chadbourne and Parke LLP.

First oil was discovered in 1959. Libya now produces 1.3 million barrels a day under its OPEC quota, but has capacity to produce...

Read the full article for free courtesy of your local library.