Libya, Africa’s second-largest oil producer, may ask foreign companies such as Royal Dutch Shell plc to help revive and expand output at existing fields, which are losing pressure after more than four decades in production.
The plan would allow the companies to own part of each barrel pumped and book reserves that lie underground in so-called production-sharing agreements, Prime Minister Shokri Ghanem said in an interview.
It would be a first in Libya and differ from the policies of most other Organisation of Petroleum Exporting Countries (OPEC) nations, which merely pay the oil companies a fee for such services, which is less attractive than Libya’s potential for companies to legally own and sell the crude.
After 11 years under United Nations sanctions, the North African state this year auctioned drilling rights to companies including Shell, Exxon Mobil Corp, Occidental Petroleum Corp and Eni SpA, part of a bid to double production. Libya and other Opec members are seeking foreign help to expand output to meet rising oil demand.
“The success of the open bidding policy will make us consider enlarging the sharing process,” Ghanem said.
“There is no decision now, but the possibility of sharing in producing fields, and in fields that are discovered but not in production, will be studied.”
Libya seeks to attract US$30 billion (US$1 = RM3.77) in investments to increase its crude-oil production to three million barrels a day in 2015 from 1.7 million now.
Source: Bloomberg
