A Review of the Nigerian Energy Industry

Libya: 5 foreign oil companies back, working

2 September 2011, Sweetcrude, Tripoli – At least five foreign oil and gas companies are back in Libya to work on resuscitating production, a Libyan official said Friday, as the country’s interim leadership sought guidance from U.N. and other experts on stabilizing the nation following strongman Moammar Gadhafi’s ouster.

Libya’s economic future could hinge on the performance of its lucrative oil and gas sectors, whose production ground to a halt during this year’s insurgency against Gadhafi. Critics of NATO’s airstrike campaign that helped the rebels say its primary purpose was securing oil and gas contracts for the West — not protecting Libyan civilians, as the U.N. mandate for the operation outlined.

Advance teams from oil and gas companies that had infrastructure in Libya “are already back” to assess damage and restart facilities, said Aref Ali Nayed, a member of the rebel-led government’s so-called stabilization team. He spoke in Paris after talks with U.N. and other international officials.

Nayed, who also is Libya’s ambassador to the United Arab Emirates, insisted that Libya’s rebel-led National Transitional Council would respect past contracts and not rush into any new deals.
“At least five companies are back,” he said. “We are seeing these companies as full partners whose interests coincide with the interests of the people.”

He named Italy’s Eni SpA as one of the companies but said he could not provide the names of the other four.
Eni, the largest foreign producer in Libya before the civil war broke out earlier this year, said this week it signed a memorandum with Libya’s rebels to restart a key natural gas pipeline and provide technical assessment of the country’s oil infrastructure.

Eni Chairman Giuseppe Recchi confirmed to The Associated Press on Friday that Eni staff members were in Libya for their gas division. As for oil, Recchi said it was too soon to say when Eni would be going in.

A spokesman for Spain’s Repsol YPF SA declined comment Friday on whether anyone was working on behalf of the company in Libya now, but said no workers pulled from the country in March as it descended into civil war have been sent back.

Repsol believes it will be possible to restart its Libyan oil production operations about four weeks after workers arrive in the country, said spokesman Kristian Rix.

French oil giant Total SA “is carefully monitoring the evolution of the situation to assess when we could restart our operations in the country,” said spokeswoman Phenelope Semavoine. She wouldn’t comment on whether advance teams are already on the ground.

Total CEO Christophe de Margerie said Thursday that the company is gearing up to restart production as soon as possible, and that offshore production would resume first.

All three companies stressed that security for employees is paramount.

World leaders meeting in Paris on Thursday emphasized that the work of war in not yet finished in Libya, especially considering that Gadhafi is still at large.

Fighting has strangled the overall oil sector in Libya, which has Africa’s largest proven reserves of conventional crude. Little to no crude is flowing through the pipelines, refineries have largely halted operations, and fuel prices have spiked during widespread shortages.

It may take months to get output back up to prewar levels.

Russia’s ambassador to NATO, Dmitry Rogozin, said Friday that the underlying reason for NATO’s intervention in Libya was access to Libyan oil.

“For Russia, NATO’s operation in Libya indicated that the major interests of the alliance now lay not in the Europe’s East — where its adversaries the Warsaw Treaty Pact and the Soviet Union used to be — but in oil-rich lands of Northern Africa and the Middle East,” Rogozin said in emailed responses to questions from The Associated Press.

NATO says it is fully complying with the U.N. mandate, and that forces loyal to Gadhafi still pose a threat to Libya’s civilians. The alliance also has rejected criticism from Russia, China and the African Union, which tried to get the warring sides in Libya to end the bloodshed through a negotiated settlement.

Russia’s envoy to talks on Libya’s future in Paris this week, Mikhail Margelov, said that Russia wants to defend its own economic interests in Libya, with which Moscow has long-standing ties.

The French newspaper Liberation reported this week that Libyan rebels offered France control over 35 percent of Libya’s oil in exchange for French support for the insurgents. But transitional council officials and France’s foreign minister firmly denied any such offer.

A spokesman for the National Transitional Council in London, Guma El-Gamaty, said on BBC radio Friday that there’s no reason why British or French companies should have priority over contracts in Libya because Britain and France were vocal and early backers of the rebels.

“I don’t think it would be right and proper to say we are going to be democratic, transparent, accountable and competitive and then start offering contracts based on favoritism,” he said.

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  • I say let them all squabble over Libya’s oil. I’m tired of adileng with the Middle East, we loose no matter what we do. Talk about a divide between the Haves and Have Not’s, you’re either rich or poor in most of these oil rich middle-eastern countries. If Occupy Wall Street protesters want to be seen as sincere, they should go to the middle-east with there class warfare rhetoric. America needs to drill at home for it’s oil and work on alternatives gradually.