Libya success as IOC and Oil India pick up four blocks

Vol 11, PW 16 (13 Dec 07) People & Policy

Luck seems to have finally shined on Indian Oil and Oil India in their quest to acquire more acreage in Libya.

On December 9, National Oil Corporation of Libya awarded a licence to explore area 95-96 comprising four onshore blocks to a consortium of Sonatrach of Algeria, in partnership with IOC and Oil India. After the 2006 debacle, when IOC and Oil India were disqualified from bidding in the last Libyan round, their perseverance seems to have paid off, with a little help from Sonatrach.

In our last issue PETROWATCH was the first to report that IOC and Oil India had signed a joint bidding agreement with Sonatrach on November 15 enabling them to bid in Libya as a consortium. At that time we had predicted they would bid for one onshore block.

As it turns out, the consortium bid for one 6934-sq km â€کarea’ that comprises four blocks. Next will be the formal signing of an Exploration and Production Sharing Agreement (EPSA) with the National Oil Corporation of Libya.

“Libyan authorities say the EPSA will be signed by mid-December,â€‌ reports a source. “But I don’t think it will be signed before January.

â€‌ Sonatrach is â€کoperator’ of the blocks and IOC and Oil India will pay their share of exploration costs as â€کinvestors’. Under the minimum work programme the consortium must drill eight exploration wells, acquire 2600-sq km 3D and 2000-lkm 2D – all within five years of signing the EPSA with Libya’s NOC.

“Drilling should not be a problem as Libya is a safe place to work,â€‌ adds a source. “Sonatrach already operates blocks in Libya so hiring a rig should not be a problem either.

â€‌ Sonatrach, IOC and Oil India beat rival bids from four companies for this area: British Gas; RWE Energy of Germany; Polskie Gorncitwo of Poland; and a consortium of Gaz De France, JAPEX and LUKOIL.