The Guardian (UK): BP and Shell miss out on oil rights: “BG has won the right to explore in two areas of oil-rich Libya, but BP and Shell have emerged empty-handed from a new round of licensing.”: Tuesday October 4, 2005
Terry Macalister
BG has won the right to explore in two areas of oil-rich Libya, but BP and Shell have emerged empty-handed from a new round of licensing.
BG, which was spun out of state-owned British Gas, has obtained 100% ownership of two licences in Area 123, which is halfway between the coast and the Chad border, and a 50% stake in a licence in Area 171, shared with Norway's Statoil. The latter location is much closer to Chad, a landlocked country that recently opened its own oil export pipeline to Cameroon.
"Libya is a prolific hydrocarbon province, which is well placed in the Mediterranean region for the markets of Europe and north America," said Stuart Fysh, a BG vice-president for Africa.
BP and Shell confirmed they had failed to secure anything from the second round of licensing, while their main US rival, Exxon Mobil, was one of the winners. BP drew a blank in the first round this year though it is known to be still talking to the government of Muammar Gadafy about other opportunities.
Shell signed a separate memorandum of understanding with Libya in May under which it won the right to explore in five areas of the Sirte basin. Industry sources said the bidding was intensely competitive, reflecting the high price of oil on world markets and a shortage of high-quality exploration areas.
Oil is the main source of revenue for Libya, which is an Opec member and has proven reserves of 29.5bn barrels of crude, the largest on the African continent. Tony Blair ended two decades of international isolation for Libya last year by visiting Tripoli and meeting Colonel Gadafy. The perceived good relations between Mr Blair and BP led some to presume that the company would be a natural winner from the opening up of Libya but this has not happened yet.
More than 120 foreign companies bid in this latest round, with the Japanese being the most successful.
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