Libya plans to better terms for oil companies

Oil Minister Abdelbari Al-Arusi said that the government plans to improve the terms for foreign oil firms ahead of its next licensing round and could begin seeking bids in the third quarter of 2013.

He said Libya would review its last round of exploration and production sharing agreements (EPSA) and "come up with the right solution for new negotiations in the future". He added that the last round EPSA IV 2004 will be reviewed for the interest of the Libyans and our partners. A lot of companies have complained about it. We don't like people to lose, because this is a win-win business," the Tripoli Post reported.

Libya had some of  the toughest shared production agreements in the world  and a number  of International Oil companies (IOC's) had complained about the situation which they said was affecting the profitabiity of their operations in Libya. Shell closed down its operations in Libya this year although it said it would contnue to monitor the situation andremained interested.Many companies were also concerned about renegotiating agreements which had been signed with the previous regime. Reuters also reported recently that there was a decline in demand for Libya's sweet crude and the market was looking to increase the sour cude which is found in other countries such as Algeria.

If Libya's NOC now seeks to allow more investor friendly incentives in its oil and gas sector it could attract new IOCs.. Algeria has announced investor incentives in its hydrocarbons sector .