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Occidental, Chevron Win Libyan Drilling Rights

From Bloomberg News

Libya said it would put about 40 plots of land for oil exploration up for bid before April, after completing an auction Saturday that saw the return of U.S. energy companies to the North African state.

Abdullah Badri, chairman of the state-owned National Oil Corp., called the auction “a big success.”

Drilling rights in 15 blocks were awarded to foreign companies, with Occidental Petroleum Corp. of Los Angeles, ChevronTexaco Corp. of San Ramon, Calif., and Amerada Hess Corp. winning the rights in 11 of the 15 blocks, alone or in partnership with other companies.

Libya, a member of the Organization of the Petroleum Exporting Countries and the site of Africa’s biggest oil reserves, wants to put decades of economic sanctions behind and draw $30 billion of investment to double production capacity to 3 million barrels a day before the end of the decade.

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American companies left Libya in 1986, when the United States imposed sanctions, alleging that the nation sponsored terrorists.

The ban eased after Libya agreed in 2003 to pay $2.7 billion to the families of those killed in the 1988 bombing of a Pan American jetliner over Lockerbie, Scotland, and to end programs to develop weapons of mass destruction.

The winners in the auction completed Saturday will spend $298 million on an exploration program that includes seismic surveys and test wells, the official news agency JANA said.

The companies will then spend billions more for rigs and pipelines to develop any discoveries and share oil and natural gas production with the government.

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New York-based Amerada Hess won the first of the 15 exploration permits, before Occidental partnerships with Liwa of the United Arab Emirates took nine of the final 14 rounds.

Woodside Petroleum Ltd. of Australia is a partner in four offshore ventures. Other winners include Petrobras of Brazil, Indian Oil Corp. of India, Oil Search Ltd. of Australia, Verenex Energy Inc. of Canada and Sonatrach of Algeria.

Oil and gas are known to exist within all but one of the drilling blocks, in an onshore region for which Occidental and Liwa were the lone bidders.


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