The grip of UN and US sanctions has made it harder for international companies to operate, but has failed to dampen their enthusiasm for investment. Libya is underexplored and underdeveloped and needs foreign capital and expertise to boost its potential. Oil production is running at about 1.4 million b/d and reserves, the largest in Africa, rose by 30 per cent in 1995 to a record 29.5 billion barrels.
The biggest potential investment is by Italy’s Agip which is ready to proceed with a $5,700 million project to export gas from the onshore Wafa field and offshore block NC41.
This would include construction of a subsea pipeline to Italy. Agip has already committed hundreds of millions of dollars to the project but is unwilling to proceed further in case fresh US sanctions force it to freeze operations.
The largest expansion scheme now under way is of the Murzuk field by a consortium led by Spain’s Repsol. This will bring production to an initial 45,000 b/d in 1997, rising in stages to 200,000 b/d by 1999. Repsol has awarded most of the major contracts for the first phase development which is valued at $300 million-400 million. France’s Total is a partner in the project.
Libya’s National Oil Corporation (NOC) has no shortage of other joint venture partners and there are seven seismic crews at work, up from only four last year. In early June, NOC signed a new exploration and development agreement for a 5,000 square kilometre onshore concession near Sirte with PanCanadian Petroleum, which is partnered by Clyde Petroleum of the UK and Yukong of South Korea. The Canadian company already has a stake in three other blocks with Fina of Belgium and Yukong.
In other developments this year the UK’s LASMO has extended its production sharing agreements for two blocks until the end of 1997.