Occidental wins Libyan contract
Posted: 26 November 2007
Occidental Petroleum Corporation has signed agreements with
the Libyan National Oil Corporation (NOC) to upgrade several of its
existing petroleum contracts.
The new agreements will be consistent
with the newly established EPSA IV contractual frame work now utilized
in the Libyan oil industry.
The term of the new agreements will be 30 years. This will enable NOC
and Occidental to design and implement major field redevelopment and
exploration programs in these contract areas in the prolific Sirte
Basin.
"Occidental is honored to be chosen to work with the Libyan National
Oil Company in the redevelopment of these jointly owned producing
fields," said Dr. Ray R. Irani, Chairman, President and Chief Executive
Officer of Occidental Petroleum.
"We expect production from these
projects will make a major contribution to NOC meeting its goal of
doubling Libya's oil production to more than 3 million barrels per day
in the near future."
The new agreements cover fields with approximately 2.5 billion barrels
of recoverable high-quality oil reserves. Over the next five years,
about $5 billion in capital investment is expected to be made to
increase gross production to more than 300,000 barrels per day from the
current level of around 100,000 barrels per day.
The Austrian oil and gas company, OMV, will join the project with a
25-percent interest with Oxy retaining a 75-percent interest. Oxy and
OMV will collectively contribute 50 percent of the development capital
and NOC will contribute the remaining 50 percent.
Utilizing the commercial framework contained in the Libya EPSA IV
contract, the Oxy group will receive 10 or 12 percent of the gross
production on an after-tax basis, depending on the specific field.
The
new contract also provides for a $1 billion signature bonus payable
over 3 years reflecting the group's long-term participation for the
next 30 years in fields containing substantial proven reserves. The
partners intend to complete final documentation as promptly as
possible.
"This agreement is consistent with our strategy of focusing our
business in core geographic regions," said Dr. Irani.
"This new project establishes Libya
as a core country for Oxy's production and we believe it will open the
door for us to add additional growth projects in a country with large
oil and gas reserves."
Oxy began operations in Libya in 1965 and continued operating until
U.S. sanctions were imposed in 1986.
Oxy was the first U.S. company to
resume oil operations in Libya after the U.S. sanctions were lifted in
2004.
In 2005, Oxy successfully bid on nine of the 15 areas available
in the first EPSA IV exploration licensing round and is currently the
largest holder of oil and gas acreage in Libya.
Posted by Richard Price, Editor, EnergyME.com
Information supplied by companies or PR agencies who are responsible for content.
Send press releases to richard@energyme.com |
