May 30, 2007
Steve Hawkes
BP is poised to return to Libya after a 33-year absence in the first big contract to be signed by Tony Hayward, its new chief executive.
The details of a $900 million (£454 million) gas exploration deal were due to be released last night as the centrepiece of a surprise visit to the former pariah state by Tony Blair.
Shokri Ghanem, chairman of Libya’s state-owned National Oil Corporation, said yesterday: “We are going to sign with BP an exploration and prospecting accord on Libyan territory worth $900 million.”
Confirmation of the agreement would mark a milestone for BP continually dubbed “Blair Petroleum” because of its close ties to the Labour Government. It was forced to leave the North African country, seen by analysts as one of the few under explored regions in the world, in 1974 when Colonel Gaddafi said that he was going to renationalise the oil and gas industry.
Shell was one of the first Western companies to return when it unveiled a $1 billion gas exploration deal three years ago in Tony Blair’s last visit to Libya. Western companies began to negotiate new deals when the United States and the European Union lifted sanctions against the Gaddafi regime in 2004.
Mr Hayward was in Tripoli yesterday alongside Mr Blair. Officially, BP would say only that it remained in “constructive talks” with Libya, but one insider told The Times: “The prize in Libya is potentially a great one.”
Libya, an OPEC member, is thought to hold reserves of nearly 40 billion barrels of oil and at least 45,000 billion cubic feet of gas.
The country is expected to play a key role in supplying gas to the UK in the coming years, given its proximity to Europe.
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article1857160.ece
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