Oil Production

 

According to IEA Libyan oil production was estimated at nearly 1.6 million barrels per day (bbl/d) in 2004, with consumption of 237,000 bbl/d and net exports of about 1.34 million bbl/d. Libya is a member of OPEC and as such is set a production quota - Libya's quota on 16 March 2005 was set at 1,473 000 bpd compared to its September 2004 quota of 1,446 000 bpd. The vast majority (more than 90%) of Libya's exports are sold to European countries like Italy (545,000 bbl/d in January-October 2004), Germany (274,000 bbl/d), France (94,000 bbl/d), Spain and Greece. Libya aims to increase oil production to 2 million bbl/d by 2008-2010, and to 3 million bbl/d by 2015.

 

Most Libyan oil is sold on a term basis, including to the country's Oilinvest marketing network in Europe; to companies like Agip, OMV, Repsol YPF, Tupras, CEPSA, and Total; and small volumes to Asian and South African companies. Libyan oil is generally light (high API gravity) and sweet (low sulfur), but also thick and waxy.

The majority of Libya’s oil and gas is found onshore in three geological trends of the Sirte Basin. The western fairway with the fields Samah, Beida, Raguba, Dahra-Hofra and Bahi; the north-centre of the country with the giant oilfields of Defa-Waha and Nasser and also the large Hateiba gas field and an easterly trend containing Sarir, Messla, Gialo, Bu Attifel, Intisar, Nafoora-Augila and Amal.

 

The priority for exploration onshore includes areas in the Ghadames, the Sirte and Murzuq basins and also underexplored areas such as Kufra and Cyrenaica. Libya will also concentrate on enhanced oil recovery for those fields which are already producing. The largest known onshore fields are the Amal Field and the Gialo field both with reserves of over 4 billion barrels of oil.

Offshore the El Bouri field discovered by Agip-ENI in 1976 is central to Libya’s plans. It is the largest offshore field with recoverable reserves of 2 billion barrels of oil and 2.5 Tcf of gas. Its first phase was completed in 1990 with production of 150,000 bpd in 1995 and 60,000 bpd in 1998. Libya hopes to turn this decline around by increased investment, access to oil industry equipment and enhanced oil recovery.

 

In 1998, Agip-ENI discovered the Murzuk Basin in the Sahara south of Tripoli. Murzuk has an output of sweet 44·API oil of 80,000 bpd. This is much lower than the expected output of 200,000 bpd but problems with the pipeline to Az Zawiya refinery held up the target. It is believed that by removing sanctions recoverable reserves will be extended by 30-50%.

Agip-ENI has been the most active foreign producer. It has been operating in Libya since 1960 and it produces about 16% of total output. About 60% of this output comes from the Bu Attifel field.

 

On January 30, 2005, Libya held its first round of oil and gas exploration leases since the United States ended most sanctions against the country. Known as EPSA 4, the round -- launched in August 2004 -- offered 15 exploration areas for auction. Approximately 56 companies registered 104 bids.

 

The US based company Occidental Petroleum received 5 onshore oil blocks and 4 offshore, gas-prone blocksin the 2005 bid round. ChevronTexaco and Amerada Hess won acreage in 1 block each. Libya's National Oil Corporation (NOC) awarded Occidental Blocks 106 and 124 in the Sirte Basin, Blocks 131 and 163 in the Murzuk Basin and Block 59 in the Cyrenaica Basin. Occidental will be the operator and will hold a 90 percent working interest in these blocks. Liwa Energy will hold the remaining 10 percent interest. Liwa is owned by Mubadala Development, the investment and development company wholly owned by the Government of the Emirate of Abu Dhabi.

 

ChevronTexaco Libya Ltd.was named successful bidder on one onshore block in Libya's first exploration license round, under the Exploration and Production Sharing Agreement IV terms. ChevronTexaco has been made operator of Block 177, with 100 percent equity.

 

Verenex Energy was awarded the right to explore for oil and gas in Area 47, a 6,182 square kilometer area in the Ghadames Basin in northwest Libya. The bid for Area 47 was submitted by Verenex as Operator with a 50% interest and its partner PT Medco Energi Internasional Tbk ("Medco"), which holds the remaining 50% interest. Medco, is an Indonesian based public integrated energy company.

 

Petrobras in consortium with Oil Search Limited acquired the exploratory rights and a share in production of Area 18, located in the Mediterranean Sea. Area 18 is made up of four blocks with a total of 10.307 km2, and situated in the offshore northeastern segment of the Libyan coastline in the Mediterranean Sea at water depths of between 200 and 700 meters. Petrobras will invest at least $21 million during a five-year exploration phase, and that could be followed by a 25-year phase of shared production rights with Libya's National Oil Corp.

 

Indian Oil Corp. (OIL) won block 86 (West Sirte), under the agreement OIL will explore for crude oil in a stretch of 7,000 km located in the Sirte Basin of Libya.