The long-awaited fourth exploration and production sharing agreement (EPSA) oil and gas licensing round, EPSA-4, has been launched by National Oil Corporation (NOC). A total of 15 concessions divided into 55 blocks - including eight offshore - have been offered to international oil companies (IOCs) in what is Libya's first licensing round since the easing of US sanctions earlier this year (MEED 16:7:04).
Oil firms already working in Libya will be automatically shortlisted. Interested companies not currently operating in the country have been invited to submit letters of application to NOC by 28 September, with prequalified firms to be announced on 19 October. The data room will be open from 20-29 October, during which the final EPSA-4 model and terms will be presented. The deadline for the submission of bids is 10 January 2005. Bids will be opened publicly the same day and signings take place later in the month. The launch of EPSA-4 is a pivotal moment in Tripoli's rehabilitation with the West, and in the words of one oil company head in Libya 'the biggest event in the industry this year'. With the easing of the embargo, IOCs are free to invest in the country for the first time in more than 20 years. 'We are pleased that it has been launched,' says the oil boss. 'And in due course, we look forward to evaluating it when the data room opens and seeing what is on offer. We are very happy with the fact that we think it is going to be a transparent process.' EPSA-4 has generated considerable interest since NOC first announced its intention to launch the round last year. The majority of the big oil majors, including the Royal Dutch/Shell Groupand the US' ExxonMobil Corporation, have all expressed interest in re-entering Libya and the licensing round is likely to attract a large number of bidders. There will also be opportunities for smaller firms. NOC has stated its intention to have as wide a mix of companies as possible to maximise potential opportunities, and several smaller players such as Chile's Sipetrol, Germany's Wintershall, Woodside of Australia and Norway's Hydro have stated their interest in the process. Libya's oil production, which currently stands at just over 1.5 million barrels a day (b/d), has fallen by about a third over the last 20 years. The embargo on technology has seen yields decline and Tripoli is keen to attract foreign investment to increase production to its target level of 3 million b/d by 2020. Proven oil reserves of about 36,000 million barrels of high-quality oil, combined with its proximity to Europe, make it an attractive investment location (Oil & Gas, MEED Special Report, 13:8:04, pages 30-32).