US firm Exxon finally enters Libya

US major Exxon Mobil has re-entered Libya after almost 25 years. Winning a large production sharing deal with the Libyan state-owned oil company, Exxon says it is happy to be back in Libya.

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By  Jyotsna Ravishankar Published  January 8, 2006

Exxon Mobil, the world’s largest publicly traded oil company, says it has struck an exploration and production sharing deal with the Libyan state-owned oil company. The deal covers the Cyrenaica Basin Contract Area 44, which was awarded last October. The area covers 2.5 million acres, from shallow to deep waters, and was awarded to the United States firm in the second licensing round in October. “We are pleased to be back in business in Libya with our success in the second licensing round,” said Phil Goss, president of the ExxonMobil subsidiary, after signing the deal with Libya’s National Oil Corporation. “In the past we worked closely with our Libyan partners to achieve many firsts in the Libyan petroleum industry, such as discovering and producing the first Libyan oil field, shipping the first oil to market and building the Marsa El Brega facility including the liquefied natural gas plant. We look forward to working with the NOC and the Libyan government to achieve great successes in Libya once again,” he said. Until recently, the international energy companies could not invest or participate in the energy sector because of international sanctions. US and EU trade sanctions against Tripoli were lifted last year, after Libyan leader Muammar Qaddafi agreed to renounce weapons of mass destruction. Libya is thought to have proven oil reserves of three billion barrels, the ninth-biggest oil reserves in the world. Experts believe that large parts of the country remain under explored and offer significant potential for discoveries. The country is also a major producer of light crude oil, the kind favoured by refineries. Libya has already announced ambitious US $30 billion plans to raise oil production, which was 1.6 million barrels per day (bpd) last year. Tripoli wants production to reach two million bpd by 2010 and three million bpd by 2015 and has been looking to foreign companies to assist investment. Western oil companies quit Libya when international sanctions were imposed on Muammar Qaddafi’s government in response to the 1988 airliner bombing. The embargo was lifted in July last year. ExxonMobil, the world’s biggest energy company, failed to obtain a Cyrenaica exploration deal in a first round of licensing held in January.

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