NOC has invited all its joint venture partners to renegotiate the terms of their agreements to bring them into line with the exploration and production-sharing agreement format that has been used in the past three international licensing rounds.

“The renegotiation round will affect all the major players in Libya,” says Jabir Khammal, North Africa analyst at IHS Energy.

On 26 November, US' Occidental Petroleum Corporation and Austria's OMV joined Italy's Eni in accepting a reduced production share from their upstream acreage in return for an extended contract.

“The main reason for the renegotiation was that the old concession contracts were due to expire in 2008-09,” says an OMV executive. “NOC's new policy has not had much of an impact on us. We would have tried to renegotiate part of the contract in 2007 and part in 2008 anyway.”

The same is unlikely to be true of other companies, which have longer to operate on their contracts. “In light of the high oil price, there is some pressure on NOC to get better terms for the state,” says the executive.

“Everybody is expected to renegotiate. Most companies have received an invitation from NOC and it is pressing hard for a response.”

“In three-four years' time, the joint venture agreement will cease to exist in Libya,” says Khammal. “Most joint ventures give a 49 per cent production share to the foreign partner, with NOC taking 51 per cent. The renegotiated contracts will see the international production share substantially reduced.”

The new 30-year agreement with Occidental and OMV covers a major field redevelopment and exploration programme in the Sirte basin. In the next five years, the joint venture plans to invest about $5bn to increase gross oil production from about 100,000 barrels a day (b/d) to more than 300,000 b/d.

Occidental and OMV will participate in the joint venture on a 75:25 basis.

Among those yet to renegotiate their contracts is PetroCanada, which has a 49 per cent interest in Veba Oil Operations, with NOC holding the balance.

The joint venture operates in eight concessions, concentrated on the onshore Sirte basin in the northeast.