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Reuters: Libya confirms gas deals with Shell, Occidental

Tue Feb 19, 2008 6:52am EST 
 
TRIPOLI, Feb 19 (Reuters) – Libya’s state-owned National Oil Corporation (NOC) ratified gas-focused exploration accords with Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and Occidental Petroleum Corp (OXY.N: Quote, Profile, Research) on Tuesday, detailing the firms’ commitments, NOC said.

Under one deal, Shell will undertake a three-dimensional seismic survey over 1,750 square km in contract area 89 in the Sirte Basin, it said.

Shell will also drill six wells, invest at least $95 million and pay NOC $103 million for permit rights, NOC said.

The second deal commits Occidental, in alliance with the United Arab Emirates firm Liwa, to carry out a two-dimensional seismic survey over 2,000 square km and a 3D survey on 1,000 square km on contract block 103 in Sirte Basin.

The alliance led by Occidental will drill three wells and invest a minimum of $70 million and pay $10 million for permit rights, NOC added.

Shell and Occidental are among foreign companies that won gas exploration permits early in December in Libya’s first gas-focused exploration round.

The gas round follows three previous exploration rounds focused on oil since the lifting of international sanctions against Libya.

Libya aims to become a major gas producer and increase production to 3 billion cubic feet per day (bcfd) by 2010, with a potential for 3.8 bcfd by 2015 versus 2.7 bcfd now.

Demand for Libyan gas has been boosted as Europe seeks to curb dependence on Russia and because gas produces relatively few of the carbon emissions blamed for global warming.

(Reporting by Salah Sarrar, editing by Anthony Barker)

© Reuters 2008 All rights reserved

http://www.reuters.com/article/companyNews/idUSL1976366020080219

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