Rosneft purchase pact with Libya

ROSNEFT has signed investment and crude-purchasing agreements with Libya’s National Oil Corporation (NOC) as more international companies return to the country to gain access to Africa’s largest reserves.

Moscow-based Rosneft agreed to invest in exploration and production in Libya, NOC said yesterday on its website, without specifying the amount or timing of the investment. The companies signed a separate accord for Rosneft to buy Libyan crude.

Bigger push

The deals are part of a bigger push by the NOC to encourage additional investments by foreign oil companies to help Libya increase its production to 2.1 million barrels a day (bpd) by 2020.

Rosneft’s press service declined to comment when contacted.

Libya, one of Opec’s smallest producers, is trying to revive output and sales of oil in spite of continuing political uncertainty and conflict between rival administrations and armed groups. Any increase in production may complicate efforts by Opec to end a global crude glut. Libya pumped 1.6 million bpd before a 2011 revolt set off years of fighting that prompted foreign investors to withdraw.

Opec agreed with other oil producers, including Russia, to reduce their collective output by 1.8 million bpd, starting on January 1. Libya was exempted from the cuts as it works to restore its oil industry. “We need the assistance and investment of major international oil companies to reach our production goals and stabilise our economy,” NOC chairperson Mustafa Sanalla said.

Jadadalla Alaokali, an NOC board member, said last week that Libya’s crude production exceeded 700 000 bpd and is due to reach 1.2 million bpd by August and 1.7 million by March 2018, when the nation’s ports and export terminals will be operating at full capacity.

Eni and Total are currently working in Libya “without difficulty”, and Schlumberger resumed operations in the country about three months ago, Alaokali said.

NOC and BP officials discussed co-operation in oil exploration and production in London on January 25. The Libyans also met with Germany’s Wintershall on February 8.

Libya’s biggest oil field, Sharara, operated by Repsol, reopened in December. The Eni-run El-Feel deposit is due to reopen within a month, Alaokali said last week. The two fields in western Libya have a combined capacity of 450 000 bpd. – Bloomberg

1.6m barrels per day was Libya’s oil output before 2011