IndianOil still believes in Libyan E&P fantasy

Vol 19, PW 17 (05 May 16) People & Policy

Forget the fact that Islamic State has steadily doubled its presence in Libya over the past year or that the country is on the verge of economic collapse.

IndianOil is ignoring the doom and gloom and clinging desperately to hope, as it optimistically predicts that together with consortium partners Oil India and Sonatrach subsidiary SIPEX it can restart drilling operations at four onland blocks in Area 95/96 of the Ghadames basin next year [2017]. After drilling five wells, the consortium suspended work on May 19, 2014 because of the growing violence.

Now it apparently wants to complete the sixth well and drill two more, according to a consortium source. However, he admits a lot depends on what stance SIPEX takes.

"SIPEX is the operator and we have to follow their decision," he says. SIPEX has been having regular review meetings with the last one on January 14, 2016 with Libya's National Oil Corporation (NOC).

This meeting aimed to resolve different challenges preventing the resumption of drilling. At the meeting SIPEX voiced fears about how the exploration infrastructure is vulnerable to terror attacks.

"Work was completely shut down in 2015," adds our source. "It was a war-like situation and infrastructure was at risk." Until the shutdown this Libyan block was lucky for IOC and Oil India which announced five back-to-back discoveries between 2012 and 2014.