Special report# Oil & gas: Libya - Middle East Economic Digest, July 20
Libya's National Oil Corporation (NOC) is finally moving closer to its long-standing oil capacity target of 2 million barrels a day (b/d).
Output has remained flat at 1.4 million b/d for some years, but NOC officials say sustainable capacity will rise to 1.7 million b/d over the next 18 months, as new acreage is brought on stream and enhanced oil recovery (EOR) projects are completed.
An increase in exploration activity is on the cards. NOC is preparing to award a raft of new licences under its new exploration and production sharing agreement (EPSA IV) licensing round for highly-rated blocks in the Murzuq, Ghadames and Cyrenaica basins.
Some familiar faces are present among the bidders, including Italy's Agip, which has equity production of 82,000 b/d from established fields. It is looking to enhance its status as the leading foreign company in the market by pushing ahead with a series of field expansion projects, among them the $500 million development of the giant Elephant field in Block NC-174 of the Murzuq basin. Project management consultant Teknica has finalised evaluation of bids for the five contracts on the project and expects to make an announcement by the third quarter. First oil from NC-174 is planned for 2002 at a rate of 50,000 b/d, rising to 150,000 b/d under a second-phase development.
Oil produced from NC-174 will be exported via the existing pipeline infrastructure to Block NC-12. The 31-inch pipeline services production from the 100-million-barrel Al-Sharara field. The operator, Spain's Repsol YPF, produces more than 150,000 b/d from the field and plans to increase output to 200,000 b/d by the end of 2001.
Repsol is also busy expanding its asset base and is completing an extensive exploratory drilling programme in adjacent blocks - NC186, NC-187 and NC-190 - in the northern Murzuq area. Likewise, Germany's Veba Oil is moving ahead with the development of its 40,000-b/d Amal field in Block NC-12, which accounts for the majority of its 50,000-b/d equity production. Offshore, France's TotalFinaElf has started development work in Block NC-137, where it expects production levels to reach 30,000 b/d by 2003.
Despite international oil company enthusiasm, Tripoli's oil and gas ambitions have remained handicapped for the past 15 years by US economic sanctions. Neither has the arrival last November of President Bush's oil friendly administration in Washington given NOC reason for optimism. All the signs are that the new administration will extend existing sanctions when the Iran Libya Sanctions Act (ILSA) comes up for renewal in August. If it does, the Oasis group of Amerada Hess, Conoco, Marathon Oil Company and Occidental Oil Corporation could be forced to relinquish rights to some rich acreage in the Sirte basin. Tripoli is keen to see the acreage at full capacity and may not be prepared to wait any longer for Washington to make up its mind. |
