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The Times: Libya invites bids for gas drilling permits in effort to boost exports

July 9, 2007
Suzy Jagger in New York

Libya has invited international energy companies to bid for 12 onshore and offshore gas drilling permits as part of its drive to boost gas exports.

The National Oil Corporation (NOC), the state-owned Libyan oil group, said yesterday on its website that exploration and production companies had until December 9 to apply.

NOC held presentations to potential partners in Tripoli yesterday and said that it would also discuss the contractual framework and technical summaries of the exploration blocks in a similar presentation next Sunday in London.

In a statement on the website, the group said that it was offering exploration and production-sharing agreements for a number of prospective gasfields across the country in an attempt to increase gas production and exports.

NOC said that energy groups must submit their bids by December 9, by hand. The winner of the auction will be announced that day.

The blocks for sale are off Libya’s west coast, in the Gulf of Sirte, and onshore in Ghadames, Murzug and Cyrenaica.

Shell and BP already have gas exploration rights in Libya, which were awarded to the oil companies over the past two years. Under BP’s exploration and production-sharing agreement, which was signed in May, the company has a 17 per cent stake in any gasfield developed, with the Libyan Government and state-owned investment vehicle taking the rest. BP agreed to invest $900 million in the development in the Gulf of Sirte and Ghadames.

Libya has gas reserves of 1.5 trillion cubic metres, which makes it one of the biggest gas players in Africa, behind Nigeria, Algeria and Egypt. The country opened a pipeline three years ago which allowed it to export gas to Italy. It also exports gas to Spain.

American sanctions against Libya were removed three years ago after the country agreed to pay compensation to victims of the Lockerbie disaster in 1988. There were 270 people killed when Pan Am Flight 103 was brought down by a bomb over the Scottish town. Since then, multinational oil companies such as Exxon-Mobil and Chevron have bid and secured drilling rights in Libya.

Britain and the rest of the European Union have sought to decrease their dependence on Russia and on Gazprom, the energy giant, for gas supply and are looking to increase their supply from Africa.

NOC controls about three quarters of the oil produced in Libya and is responsible for operating the Amal-Ras Lanuf oil pipeline in the country. It is wholly owned by the Libyan Government.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2045344.ece

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