Rosneft signs Libya oil deal as more investors return to country
CAIRO (Bloomberg) -- Rosneft signed investment and crude-purchasing agreements with Libya’s National Oil Corp. as more international companies return to the North African country to gain access to Africa’s largest reserves.
Moscow-based Rosneft agreed to invest in exploration and production in Libya, the state-run NOC said in a statement on its website, without specifying the amount or timing of the investment. The companies signed a separate accord for Rosneft to buy Libyan crude.
The deals are part of a bigger push by the NOC to encourage additional investments by foreign oil companies to help Libya increase its production to 2.1 MMbpd by 2020, according to the statement. Rosneft’s press service declined to comment when contacted by phone.
Libya, one of OPEC’s smallest producers, is trying to revive output and sales of oil in spite of continuing political uncertainty and conflict between rival administrations and armed groups. Any increase in production may complicate efforts by OPEC to end a global crude glut. Libya pumped 1.6 MMbpd before a 2011 revolt set off years of fighting that prompted foreign investors to withdraw.
OPEC agreed with other oil producers including Russia to reduce their collective output by 1.8 MMbpd starting Jan. 1. Libya was exempted from the cuts as its works to restore its oil industry.
Production Goals
“We need the assistance and investment of major international oil companies to reach our production goals and stabilize our economy,” NOC Chairman Mustafa Sanalla said in the statement. Jadadalla Alaokali, an NOC board member, said last week that Libya’s crude production exceeded 700,000 bpd and is due to reach 1.2 MMbpd by August and 1.7 MMbpd by March 2018, when the nation’s ports and export terminals will be operating at full capacity. Eni and Total are currently working in Libya “without difficulty,” and Schlumberger resumed operations in the country about three months ago, Alaokali said in an interview in Cairo.
NOC and BP officials discussed cooperation in oil exploration and production on Jan. 25 in London. The Libyans also met with Germany’s Wintershall on Feb. 8.
Libya’s biggest oil field, Sharara, operated by Repsol, re-opened in December. The Eni-run El-Feel deposit is due to re-open within a month and produce an initial 75,000 bpd, Alaokali said last week. The two fields in western Libya have a combined capacity of 450,000 bpd.
