Libyan Oil Minister Mohamed Aoun highlighted the necessity of exploiting the country’s huge oil and gas reserves, noting that his country’s government had allocated $17 billion in investments to advance the oil and gas sector, while confirming that he did not oppose the return of international oil companies to exploration and exploration work in the country. .
Libya aims to produce 1.3 million barrels per day by the end of this year (2023), and two million barrels per day in the long term.
Aoun stressed – in an interview published by the “Argus Media” platform – that the challenge is to expedite the exploitation of the remaining reserves, according to the statements seen by the specialized energy platform.
He said, “We have to work day and night in order to exploit all this wealth before it is too late. Most of the investments in these projects will be joint between international oil companies and the Libyan National Oil Corporation, and thus Libya will pay half.”
New licensing round
Libyan Minister of Oil, Muhammad Aoun, stated that the Libyan National Oil Corporation was late in offering a new licensing round, as it intends to conduct a round in 2024, the first since 2007, indicating that he requested this during the past year (2022).
Aoun said, “Not even a seismic survey was conducted for areas ranging between 30% and 40% of our land and sea.”
Regarding the existence of any plans to replace the fourth form of the Libyan exploration and production sharing agreement, Aoun stressed that the ministry’s goal is to develop a form of the new exploration and production sharing agreement, or something similar to the production sharing agreement.
He added, “There are several options. But we don’t know if the oil companies might be interested in this or not.”
The following infographic – prepared by the specialized energy platform – shows the harvest of the Libyan oil sector in the first quarter of 2023:
Eni deal is not justified
Libyan Oil Minister Mohamed Aoun expressed his reservations about signing a large deal between the Libyan National Oil Corporation and the Italian company Eni, worth $8 billion, to develop the Al-Wafa and Al-Salam offshore gas fields.
He indicated that the government approved the deal, but “will it adopt it or not, that is another matter.”
He said, “We were not against proceeding with the project, we were against changing the conditions.. The ministry still feels that there is no strong economic justification for that. The offshore project is producing, and Eni has recovered exploration costs that exceeded one billion dollars. However, they argue that this is not economic.” .
“We find this rather inconvenient, because one of the examples we gave is to compare it with Eni’s recently approved acquisition of half of BP’s stakes in 3 big exploration blocks, and Eni only gets a cost-recovery stake of 18%,” he added.
The return of international companies to Libya
In the interview, which was seen by the specialized energy platform, the Libyan Minister of Oil mentioned the approval of the Waha oil field partners of the Libyan National Oil Corporation, Total Energy and ConocoPhillips, to invest in the North Giallo and NC-98 projects.
However, he confirmed that they had officially delivered a message stating that they wanted to change the conditions before they invested. It’s been 5 years now, and we don’t know when we can come to an agreement with them and ConocoPhillips.”
He stressed that changing the conditions would not be easy, but “the door was opened with the Loyalty and Peace deal that gave Eni better conditions.”
“Now, Total and ConocoPhillips also want to renegotiate the terms. I’m 100% sure the others will want to renegotiate too, Repsol and Wintershall Dea, maybe OMV,” he said.
He continued, “It is fair and from a practical point of view, if you see that someone has improved the conditions, that other companies demand the same treatment.”
And about the talks of ADNOC, Eni and Total Energy companies with the Libyan National Oil Corporation to enter the NC-07 block in Hamada, targeting a capacity of 200 million cubic feet per day; Aoun stressed that he did not oppose the return of international companies, but he stressed the need for companies to come to carry out exploration activities, and not in the discovered fields.
The fields in the NC-07 block were most likely discovered in the 1960s, and the gas pipeline from Wafa to Mellitah runs along that block.
He said, “It will be easy to start production to connect it to this pipeline, and on the second day you will get your investment back. Personally, I will not agree to grant such a square to any foreign investment.”
Libyan oil production and revenues
Libyan oil production received support through the introduction of a number of new wells on the production lines, and the increase in the production of a number of others in 7 main fields, within the framework of the Libyan Oil Corporation’s strategy to raise production levels to 1.3 million barrels per day by the end of the current year (2023).
On June 12, the management of the Arabian Gulf Oil Company “Agoco” announced an increase in the production of the well “C18-47” in the Al-Bayda oil field to 700 barrels of oil per day, an increase of 590 barrels.
The Libyan Oil Corporation, through its subsidiaries, is implementing plans to rehabilitate closed wells, or whose production rate has decreased for technical reasons, in order to maintain the current production rates, try to raise them according to the available capabilities, and focus on increasing production in all possible ways, after studying a number of wells and developing designs and programs. Determine the processes required for these wells to increase their production.
Libyan oil production is stable, with the government’s steps to avoid field closures and improve workers’ salaries, helping to increase production by about a quarter since January 2022 to an average of 1.2 million barrels per day now.
The following graph – prepared by the specialized energy platform – shows Libyan oil production from 2017 to 2022:
And the stability of oil production supported the revenues of the country’s general budget, as the total sales of oil, gas and oil derivatives during last May amounted to about $1.661 billion, including $1.572 billion from crude oil sales, and about $29 million from gas and condensate sales.
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