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Daily Telegraph: Libya invites bids for drilling rights

Daily Telegraph: Libya invites bids for drilling rights

“The news emerged amid reports that Shell’s Libyan deal, which is still at the preliminary stage, was stalling.”

By Christopher Hope, Business Correspondent (Filed: 17/08/2004)

Libya, which was welcomed back into the international fold four months ago, yesterday invited oil and gas companies to bid for drilling rights there.

The news is the first open invitation to oil and gas companies since Shell signed a deal to build a $200m liquefied natural gas terminal during a visit by Prime Minister Tony Blair in March.

Libya’s National Oil Company announced that it was offering exploration and production rights on almost 130,000 sq km, divided into 15 blocks in the north and west of the country.

To whip up interest, NOC officials are holding briefings in Tripoli and London next month. Companies will be able to bid for the blocks and pay fees of up to $130,000 to access the individual data rooms.

Sealed bids must be submitted between 8am and 10am on January 10 at the Menhari hotel, Tripoli, with a guarantee from the Libyan Arab Foreign bank. The first exploration and production sharing agreements should be signed later that month. Analysts forecast a great deal of interest. John McInespie, a partner at US law firm Butera & Andrews, said: “This is big time.

“Everybody wants to see what Libya has to offer. By bringing the roadshow to London they are saying ‘we are open to business’.

“This is good news. The Libyans have done this in their own time and will not put their eggs in one basket so we think that there will be plenty of room for the smaller players.”

Wood Mackenzie, the oil analysis firm, described Libya as a “significant oil producing nation” with an estimated 32billion barrels of oil and gas.

The Centre for Global Energy Studies said the news could help to increase oil production in Libya – which was “stagnant” at 1.5m barrels of oil per day (bpd) from 1998 to 2003 – by 500,000 to 2m bpd by 2010.

Leo Drollas, chief economist, said: “They need to increase their production capacity – they have been under sanctions for a long time.”

BP said it “would be interested in finding out further information, but we have no plans for the country at the moment”.

The news emerged amid reports that Shell’s Libyan deal, which is still at the preliminary stage, was stalling. However, Shell said: “We look forward to the signing and ratification of definitive agreements in the coming months.”

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