Shell to return to Libya's upstream arena, develop LNG export facilities

Shell Libya Petroleum Development BV has signed a heads of agreement with Libyan National Oil Corp. establishing a long-term strategic partnership that could lead to the development of world-class integrated upstream projects to enhance Libya's oil and gas production and its LNG export capacity.

March 30, 2004

2 min read

By OGJ editors

HOUSTON, Mar. 30 -- Shell Libya Petroleum Development BV has signed a heads of agreement with Libyan National Oil Corp. establishing a long-term strategic partnership that could lead to the development of world-class integrated upstream projects to enhance Libya's oil and gas production and its LNG export capacity.

The HOA comprises a preliminary understanding regarding key principles that outline Shell's Libyan participation, including onshore exploration and the development of LNG facilities. The companies will continue negotiations on specific projects throughout the year.

"I look forward to our cooperation becoming a cornerstone in a renewed trade relationship between the UK and Libya," said Malcolm Brinded, CEO of Shell Exploration & Production and Shell Gas & Power.

Shell, a member of the UK-based Royal Dutch/Shell Group, had been active in the Libyan upstream from the 1950s until 1974 and also conducted exploration in the country in the late 1980s.

Shell's move comes on the heels of a statement last month by US President George W. Bush essentially opening the door to US and non-US oil companies' resumption of business relationships with Libya, previously banned since 1996 by the Iran-Libya Sanctions Act (OGJ, Feb. 9, 2004, p. 20). Unless renewed, the controversial US legislation will expire in 2006.

Earlier this month, Occidental Petroleum Corp. president Ray R. Irani also met with Libyan officials to discuss resumption of its operations that were suspended in 1986 (OGJ Online, Mar. 15, 2004). Occidental plans to open an office in Tripoli soon, Irani said