The Times
Robin Pagnamenta, Energy Editor
At 42 billion barrels, Libya has the largest proven oil reserves of any African country — equal to about 3 per cent of the global total. Its gas reserves are some 1.5 trillion cubic metres, the fourth-largest in Africa.
But Libya remains relatively unexplored, and the potential for fresh discoveries means that the true total could be far higher. That is why Libya’s return to the international fold has triggered a scramble for drilling rights among international oil companies.
Three of Britain’s biggest — BP, Royal Dutch Shell and BG — have already signed preliminary deals to provide cash and expertise to develop Libya’s investment-starved oil and gas industry. Shell signed in 2004, only months after Libya publicly abandoned plans to develop weapons of mass destruction, and the UN Security Council voted unanimously to lift sanctions.
BP’s much bigger deal, worth an estimated $900 million, was announced in 2007 during a visit by Tony Blair, then Prime Minister, to Tripoli. The company, which withdrew from Libya in 1974 when the country nationalised its oil industry, will explore 54,000sq km — at the onshore Ghadames and offshore Sirte basins.
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British companies are competing against a host of rivals including Total, of France, the American ConocoPhillips, China National Petroleum Corp and Gazprom, the Russian state-controlled producer.
The British Government also has a strong vested interest in the programme. With North Sea gas running out fast, it hopes that Libya could become an alternative to Russia as a source of supply. By 2015, Britain could be importing as much as 80 per cent of its gas needs, up from 40 per cent now.
Exploration work in Libya in the 1960s identified at least ten fields each with more than a billion barrels of oil. Modern techniques could uncover more, and vast areas of the Libyan Sahara remain unexplored. Exploration licences cover only one third of the country. A spokesman for BP said that — if its exploration programmes offshore and in the country’s west are successful — it could invest $20 billion or more over the next 20 years building refineries, pipelines, petrochemical and liquefied natural gas plants to allow exports to the UK and elsewhere.
Libya, a member of the Opec cartel, which earns more than 95 per cent of its export revenue from oil and gas, is suffering from the impact of weaker oil prices this year. It desperately needs foreign investment to boost production, which at 1.8 million barrels a day is only a little more than half its peak of 3.3 million barrels in 1970.
John Mitchell, an oil industry specialist at Chatham House, the foreign policy think-tank, said: “There has not been much investment, so the Libyans do need the money. There is probably a lot more oil and gas there waiting to be discovered.” But fossil fuels are not the only source of interest for foreign companies.
British engineering firms such as Halcrow have won engineering contracts in the country, while France is pushing to sell Libya nuclear reactor technology.
Robin Pagnamenta, Energy Editor
At 42 billion barrels, Libya has the largest proven oil reserves of any African country — equal to about 3 per cent of the global total. Its gas reserves are some 1.5 trillion cubic metres, the fourth-largest in Africa.
But Libya remains relatively unexplored, and the potential for fresh discoveries means that the true total could be far higher. That is why Libya’s return to the international fold has triggered a scramble for drilling rights among international oil companies.
Three of Britain’s biggest — BP, Royal Dutch Shell and BG — have already signed preliminary deals to provide cash and expertise to develop Libya’s investment-starved oil and gas industry. Shell signed in 2004, only months after Libya publicly abandoned plans to develop weapons of mass destruction, and the UN Security Council voted unanimously to lift sanctions.
BP’s much bigger deal, worth an estimated $900 million, was announced in 2007 during a visit by Tony Blair, then Prime Minister, to Tripoli. The company, which withdrew from Libya in 1974 when the country nationalised its oil industry, will explore 54,000sq km — at the onshore Ghadames and offshore Sirte basins.
Related Links
Lockerbie: Britons back convict's release
Britain’s sustained courtship of Libya
British companies are competing against a host of rivals including Total, of France, the American ConocoPhillips, China National Petroleum Corp and Gazprom, the Russian state-controlled producer.
The British Government also has a strong vested interest in the programme. With North Sea gas running out fast, it hopes that Libya could become an alternative to Russia as a source of supply. By 2015, Britain could be importing as much as 80 per cent of its gas needs, up from 40 per cent now.
Exploration work in Libya in the 1960s identified at least ten fields each with more than a billion barrels of oil. Modern techniques could uncover more, and vast areas of the Libyan Sahara remain unexplored. Exploration licences cover only one third of the country. A spokesman for BP said that — if its exploration programmes offshore and in the country’s west are successful — it could invest $20 billion or more over the next 20 years building refineries, pipelines, petrochemical and liquefied natural gas plants to allow exports to the UK and elsewhere.
Libya, a member of the Opec cartel, which earns more than 95 per cent of its export revenue from oil and gas, is suffering from the impact of weaker oil prices this year. It desperately needs foreign investment to boost production, which at 1.8 million barrels a day is only a little more than half its peak of 3.3 million barrels in 1970.
John Mitchell, an oil industry specialist at Chatham House, the foreign policy think-tank, said: “There has not been much investment, so the Libyans do need the money. There is probably a lot more oil and gas there waiting to be discovered.” But fossil fuels are not the only source of interest for foreign companies.
British engineering firms such as Halcrow have won engineering contracts in the country, while France is pushing to sell Libya nuclear reactor technology.
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