Japanese operators to enter Libyan exploration

Oct. 3, 2005
Libya's National Oil Co. (NOC) has awarded exploration rights through an international tender to five Japanese companies. They are the first oil concessions ever won in Libya by Japanese corporations.

Eric Watkins
Senior Correspondent

LOS ANGELES, Oct 3 -- Libya's National Oil Co. (NOC) has awarded exploration rights through an international tender to five Japanese companies. They are the first oil concessions ever won in Libya by Japanese corporations.

Nippon Oil Group's wholly owned subsidiary Nippon Oil Exploration, in a venture with Mitsubishi Corp., won a ¥6 billion contract to drill on the 2-1/2 Block, covering 4,905 sq km. Nippon Oil will hold a 90% stake in the block, with Mitsubishi holding the remaining 10%.

Japan Petroleum Exploration, together with Nippon and Mitsubishi, won a ¥4.0 billion drilling rights contract for the 4,571-sq km 40-3/4 Block. Japan Petroleum holds a 42% stake in the block, while Nippon has 38% and Mitsubishi 20%.

Japan Petroleum independently won a ¥3.5 billion drilling rights contract for the 176-4 Block, occupying 2,828 sq km.

Teikoku Oil and Mitsubishi jointly won a ¥3.4 billion contract for the 81-2 Block, covering 2,708 sq km, and a ¥4.1 billion contract for the 82-3 Block, totaling 2,687 sq km. Teikoku holds a 73% stake in both blocks, while Mitsubishi holds 27%.

Inpex Corp. and France's Total SA jointly won drilling rights for the 42-2 and 42-4 Blocks, which cover 3,419 sq km. Total holds a 60% stake in the two blocks, and Inpex holds 40%.

The Japanese companies said they will spend 5 years assessing the blocks. If the blocks are commercially viable, production is likely to start as early as 2012-13.

According to the International Energy Agency, Libya produced 1.6 million b/d in 2004, with some 1.34 million b/d exported. The country has announced plans to increase production to 2 million b/d by 2008-10 and 3 million b/d by 2015.

In this latest bidding round, NOC awarded 44 oil exploration permits to predominantly Asian and European companies, with a total of 51 firms taking part.

In January, NOC, in its first licensing round since US sanctions were lifted in 2004, awarded 15 exploration permits to 12 non-European companies out of a field of 56 international operators that prequalified to participate in the auction (OGJ Online, Feb. 7, 2005).

In September, Occidental Petroleum Corp.—the first US oil and gas producer to resume operations in the North African country—lifted its first Libyan crude oil for shipment to the US since leaving its operations in the prolific Sirte basin in 1986 due to economic sanctions.

Contact Eric Watkins at [email protected].