Shell halts oil exploration projects in Libya,BP signals return.
Royal Dutch Shell announced that it was halting exploration activities in Libya due to "disappointing results". This is a blow to to Libya whose oil production is returning to pre revolution levels.However Shell said it would keep its representative office open in Libya and continue to study exploration proposals.
Source : https://www.marocafrik.com/english/Shell-halts-oil...
"Shell Exploration and Production Libya GmbH has informed the National Oil Corporation that it intends to suspend and abandon drilled wells and stop exploration in Libyan licenses LNGDA and Area 89," a Shell spokesman said.
"Despite an extensive seismic and drilling campaign in these licences, results have been disappointing and further exploration cannot be economically justified."
The spokesman added: "NOC has acknowledged our decision and we have agreed to actively peruse new upstream business opportunities."Shell continues to view Libya as an important country in its portfolio and will maintain a representative office to pursue upstream business opportunities with the Libyan NOC."
In 2004, Shel l signed preliminary deals with Gaddafi’s regime potentially worth billions of dollars of investments, from exploration to a possible liquefied natural gas plant.
Shell entered the Libyan market following the visit of then Prime Minister Tony Blair who met Gaddafi in his tent
where a deal was said to have been struck which also is said to have included BP.
BP which also enterred the Libyan market at the same time and withdrew during the Libyan revolution because of security concerns has however announced its intention to return to operations in Libya although it will take sometime to get its exploration operations up and running.
The head of Libya’s National Oil Corporation, Nuri Berruien, and Michael Daly, BP’s executive president for exploration, agreed in Tripoli on Tuesday to lift force majeure, the legal mechanism under which BP suspended its operations last year because of security concerns during the Libya revolution.
An article in the Tripoli Post says that Shell's pull out is a warning to the National Oil Corporation (NOC) that large
International Oil Companies (IOCs) will not continue to accept unprofitable deals. IOCs operating in Libya enter joint ventures with NOC on the basis of Exploration and Production Sharing Agreements (EPSAs).
The ESPA IV agreements are especially strict and reduced the profit levels of IOC's . In addition the Libyan NTC government has delayed renewing contracts made with the Gaddafi regime which has added to the uncertainty and instability facing the IOCs as they await the election of a new government in June.
The Tripoli Post notes that The German company Wintershall which accounts for 6 per cent of Libyan output, has indicated that the current investment terms could impact on future investment decisions . Security is also a major concern for the IOCs.
However,General Electric's President and CEO, Nabil Habayeb said in an interview with Arabian Business the the power generation company expects to generate as much as US$10bn in revenue from Libya, as the North African country vies to rebuild its economy, infrastructure, and institutions and respond to the demands of its population.
"Despite an extensive seismic and drilling campaign in these licences, results have been disappointing and further exploration cannot be economically justified."
The spokesman added: "NOC has acknowledged our decision and we have agreed to actively peruse new upstream business opportunities."Shell continues to view Libya as an important country in its portfolio and will maintain a representative office to pursue upstream business opportunities with the Libyan NOC."
In 2004, Shel l signed preliminary deals with Gaddafi’s regime potentially worth billions of dollars of investments, from exploration to a possible liquefied natural gas plant.
Shell entered the Libyan market following the visit of then Prime Minister Tony Blair who met Gaddafi in his tent
where a deal was said to have been struck which also is said to have included BP.
BP which also enterred the Libyan market at the same time and withdrew during the Libyan revolution because of security concerns has however announced its intention to return to operations in Libya although it will take sometime to get its exploration operations up and running.
The head of Libya’s National Oil Corporation, Nuri Berruien, and Michael Daly, BP’s executive president for exploration, agreed in Tripoli on Tuesday to lift force majeure, the legal mechanism under which BP suspended its operations last year because of security concerns during the Libya revolution.
An article in the Tripoli Post says that Shell's pull out is a warning to the National Oil Corporation (NOC) that large
International Oil Companies (IOCs) will not continue to accept unprofitable deals. IOCs operating in Libya enter joint ventures with NOC on the basis of Exploration and Production Sharing Agreements (EPSAs).
The ESPA IV agreements are especially strict and reduced the profit levels of IOC's . In addition the Libyan NTC government has delayed renewing contracts made with the Gaddafi regime which has added to the uncertainty and instability facing the IOCs as they await the election of a new government in June.
The Tripoli Post notes that The German company Wintershall which accounts for 6 per cent of Libyan output, has indicated that the current investment terms could impact on future investment decisions . Security is also a major concern for the IOCs.
However,General Electric's President and CEO, Nabil Habayeb said in an interview with Arabian Business the the power generation company expects to generate as much as US$10bn in revenue from Libya, as the North African country vies to rebuild its economy, infrastructure, and institutions and respond to the demands of its population.
Source : https://www.marocafrik.com/english/Shell-halts-oil...