BP signs $900 million Libyan exploration deal

BP PLC and a Libyan partner will drill 17 exploratory wells under a $900 million contract with Libya's National Oil Co. (NOC).

Uchenna Izundu
International Editor

LONDON, May 30 -- BP PLC and a Libyan partner will drill 17 exploratory wells under a $900 million contract with Libya's National Oil Co. (NOC) covering 54,000 sq km in the onshore Ghadames basin and frontier offshore part of the Sirte basin. BP said its program will primarily target gas.

BP and the partner, Libya Investment Co., will shoot 5,500 km of 2D seismic survey and 30,000 sq km of 3D seismic survey. "Successful exploration could lead to the drilling of around 20 appraisal wells," BP said.

BP Chief Executive Tony Hayward described the deal as the company's "single biggest exploration commitment." The company hasn't worked in Libya since the country nationalized the oil industry more than 30 years ago.

NOC wants to boost Libya's oil reserves to 20 billion boe under a plan covering 2005-15 through an aggressive offshore and frontier exploration program. NOC expects to increase production to 3.5 million b/d by 2020 by encouraging the drilling of at least 50 wildcats/year and acquiring at least 4,000 sq km/year of 3D seismic eata and 10,000 km/year of 2D seismic data.

"These targets will be met through existing NOC and joint venture operations and through investment by international oil companies expected to total some $7 billion," BP said.

Libyan professionals will receive petroleum education and training under a $50 million program organized by BP and NOC during the exploration and appraisal period of the new contract. If oil is found, an additional $50 million will be invested on training once production starts.

Contact Uchenna Izundu at uchennai@pennwell.com.

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