THE WALL STREET JOURNAL: Libya Govt Gives Go-Ahead For New Energy Auction-Official: “Monday, Royal Dutch/Shell Group reached a comprehensive agreement for gas exploration and liquefaction with NOC, its first major project in the country in 30 years. The return to Libya is seen as a way to boost the oil major's dwindling reserves and strengthen its position as the world's largest producer of liquefied natural gas.” (ShellNews.net) Posted 7 May 05
DOW JONES NEWSWIRES
LONDON -- The Libyan government has given the go-ahead for Libya to offer a second oil and gas bidding round to foreign oil majors, a top Libyan oil official said Friday.
Abdulla Salem El-Badri, chairman of the Libyan National Oil Co. (NOI.YY), told Dow Jones Newswires that as part of the latest auction, 26 energy contracts will be awarded Oct. 2 to international oil majors. He said the projects include 44 oil and gas blocks, based both offshore and onshore.
"We are optimistic and hopeful the latest round will be a big success, El-Badri said.
He said NOC will hold roadshows in Tripoli and London in coming weeks to promote the round.
In January, Libya's first exploration and production-sharing agreement auction since 2000, attracted $150 million in investment and bids from more than 60 companies, including most U.S. oil majors and many smaller independents.
Many foreign oil majors are believed to be holding out for this round when more attractive acreage is expected to be offered. Certainly international oil firms lured by billions of barrels in oil reserves are eager to get a foothold in the North African country.
Monday, Royal Dutch/Shell Group (RD, SC) reached a comprehensive agreement for gas exploration and liquefaction with NOC, its first major project in the country in 30 years.
The return to Libya is seen as a way to boost the oil major's dwindling reserves and strengthen its position as the world's largest producer of liquefied natural gas.
"Its an educated guess as to what kind of reserves we are expecting to find as part of this deal," El-Badri said. "But we certainly expect to find enough gas to upgrade our existing LNG project and develop a new LNG facility."
Under the 30-year agreement, which confirms a preliminary deal signed in March 2004, Shell will upgrade Libya's Marsa Al-Brega LNG plant at a minimum cost of $105 million.
The Anglo-Dutch company said the expenditure could rise to $450 million, eventually increasing the plant's output from 0.7 million tons a year to 3.2 million tons.
But El-Badri said negotiations continue to drag between Libyan oil officials and executives from Marathon Oil Corp, (MRO) Amerada Hess Corp (AHC) and ConocoPhillips (COP), known as the Oasis Group, about returning to Libya's Waha oil concession.
The companies, which together make up the Oasis Group, were forced to leave Libya when U.S. sanctions were imposed nearly two decades ago.
"We continue to press on. But I really hope something will happen soon, as things are generally coming together here," he said.
A U.S. industry source close to the negotiations said recently, "it is not a simple matter of just returning. We are continuing to move forward and hopefully we will have a resolution soon."
-By Sally Jones, Dow Jones Newswires; 44-207-842 9347; email@example.com
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