Libya’s state-owned National Oil Corporation (NOC) has signed two major deals with international partners to ensure the continuing flow of foreign investment into the country.
The first deal covers the completion of the joint venture agreement between NOC, the Libyan Investment Authority and Norwegian fertiliser company Yara. The partnership covers the upgrade of fertiliser production capacity at the Marsa al-Brega complex and a study on the development of new, world-scale fertiliser facilities.
Yara will hold 50 per cent of the new company, with the remainder split between the two Libyan parties. The new project company will expand the existing 700,000-tonne-a-year (t/y) ammonia plant and the 900,000-t/y urea unit (MEED 25:4:07).
As part of the agreement, NOC will supply natural gas feedstock for the complex while Yara will provide technology and marketing expertise.
The second deal involves the extension of two existing exploration and production sharing agreements (EPSAs) between NOC and France’s Total, Norway’s StatoilHydro, Austria’s OMV and Spain’s Repsol.
Under the terms of the deal, which covers blocks NC115 and NC186 in the Murzuq basin, the foreign partners will have their operating licence extended on both blocks until 2032.
The agreement, signed under the 2005 EPSA IV framework, will see their production share drop to 13 per cent on NC115 and 12 per cent on NC186. The consortium will also have to pay a signature bonus of $1bn, payable over three years.
Additionally, all parties have agreed to increase total production from both blocks by 80,000 barrels a day (b/d) to 380,000 b/d by 2012.
Libya has been revising EPSA terms in its favour over the past two years. With access to hydrocarbons reserves becoming more limited and the oil price reaching record highs, national oil companies have been keen to gain a greater proportion of their country’s oil and gas sales.