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Libya Says Chevron and Occidental Exit Licences

Source: Reuters 10/2/2010, Location: Africa

Chevron and Occidental have not extended their five-year oil and gas licences in Libya, a senior executive with Libya's NOC state energy firm told Reuters. Other companies whose licences were not extended included Australia's Woodside Petroleum and Abu Dhabi-based Liwa Energy (a wholly-owned subsidiary of Mubadala Development Company), NOC Exploration Director Hadj Fitouri said in an interview.

He said the companies which had agreed licence extensions were Hess, Petrobras, Indonesia's Medco Energi, Oil India Ltd and Algerian state energy firm Sonatrach.

Chevron and Occidental were part of a first wave of foreign firms which rushed to invest in Libya's energy sector after sanctions were lifted but many of them have since failed to make any major oil or gas discoveries.

'Some companies have seen their deals extended but other firms did not want to extend their deals and are on the way to leaving Libya,' Fitouri said in the interview. 'The companies have discovered a total of 2.161 billion barrels of crude oil and 7.877 billion cubic feet of gas during the five-year period,' he said.

Another NOC official, Naim Gueriani, said those firms which had renewed their licences had paid Libya about $133 million in fees for the extensions.

Foreign companies signed up to a series of five-year exploration and production licences in 2005, the first time they had been able to invest there since international sanctions on former international outcast Libya were lifted a year earlier. The companies arrived on a wave of optimism that they would make big finds in Libya, which is home to Africa's largest proven oil reserves but is relatively under-explored.

However, the reality did not meet up to some investors' expectations. Discoveries were modest while energy companies also had to deal with a political and regulatory environment which could be unpredictable. Chevron picked up one prospect and Occidental was awarded interests in nine exploration blocks in the 2005 licensing round, but neither company reported any major finds.

Some of the biggest foreign players in Libya's energy sector were not affected by this year's round of contract renewals. BP, ExxonMobil and ENI operate in Libya while ConocoPhillips, Hess, and Marathon Oil are partners with the NOC in the Waha Oil Company, which has several fields in production.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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