Gazprom, Shell, Sonatrach and Polski win first gas contracts in Libya
Libya on Sunday awarded four potentially lucrative gas exploration contracts to fuel giants Shell, Gazprom, Sonatrach and Polski, the first ever given to foreign firms as relations warm between Tripoli and the West.
The biggest award went to Algerian firm Sonatrach in association with Oil India and Indian Oil, which was given four blocks covering 6,934 square kilometres (2,677 square miles).
Russian giant Gazprom was awarded three exploration blocs with a total area of 3,936 square kilometres in the southern Ghadames basin.
Gazprom beat off competition from Gaz de France, Inpex of Japan, Russian rival Lukoil, Britain’s BG and Polski, agreeing to cede 90 percent of its eventual production to Libya’s state-owned National Oil Corporation (NOC).
Anglo-Dutch company Shell was handed a two-block contract to explore a 1,790 square kilometre area in the northern Sirte basin and Polish firm Polski was also awarded a two-block area in the southern Murzak basin.
Shell was awarded its exploration rights following a bid of 93 million dollars and 85 percent of its eventual production.
Sonatrach outbid Gaz de France, BG, Polski and Germany’s RWE and proposed 87 percent of its production go to the NOC.
A total of 35 companies had been pre-selected to bid for the dozen contracts awarded Sunday to explore 41 gas blocks in the Mediterranean, the Sirte basin in the north-central area of the country, Cyrenaica further east and Murzek and Ghadames in the south.
The blocks cover a total of 72,500 square kilometres (almost 28,000 square miles), an area the size of Scotland.
It was the first time Libya invited tenders for natural gas exploration.
Regarding eight as yet unattributed blocks, National Oil Company president Shukri Ghanem said the NOC “will decide next week if it will award licences or if it will keep them for a second invitation to tender.”
With the end of UN sanctions after Libyan leader Moamer Kadhafi’s dramatic decision in December 2003 to abandon weapons of mass destruction programmes, oil and gas exploration has picked up at a frenetic pace.
OPEC member Libya is the African continent’s second largest oil producer at 1.7 million barrels per day. It also has natural gas reserves estimated at 1,314 billion cubic metres (46,403 billion cubic feet).
Among the notable losers on Sunday was French company Gaz de France, which imports large quantities of Libyan natural gas.
Earlier, a company official said it was keen to “get a foothold” in exploration in the country.
“Libya interests us the most and we wish to work there,” head of exploration and production at Gaz de France Renato Gurrero-Serreau told AFP.
Kadhafi, whose country spent years in diplomatic isolation for its alleged support of terrorists, begins a high-profile visit to France on Monday during which he will hold talks with President Nicolas Sarkozy in Paris.