Sonatrach Working to Resume Libya Operations
Sonatrach Group is in the process of restarting activity in Libya having decided to lift a force majeure on operations in the North African country.
A delegation from the Algerian state-owned oil and gas company met with representatives of Libya’s National Oil Corp. (NOC) in Tripoli.
“This visit is part of the formalization of the process of resuming the activities of the SONATRACH Group in Libya, after an observed shutdown of several years, and will allow the execution of the contractual obligations of the SONATRACH Group in the field of exploration, concerning blocks ‘065’ and ‘96/95’ located in the Ghadames basin”, Sonatrach said in a press release last week, as translated from French.
“This resumption of activity has begun following the official notification sent by SONATRACH concerning the lifting of the state of force majeure, in response to the invitation from the National Oil Corporation (Libya) addressed to international companies operating in the field of oil and gas”.
On August 3 the NOC announced BP PLC and Eni SPA had decided to lift their force majeure declarations and resumed “contractual obligations in the blocks awarded to them in the Ghadames Basin (A-B) and offshore Block C”, as stated in an official news release at the time.
The NOC on December 5, 2022 issued a call for international oil and gas companies that have exploration and production agreements in Libya to lift their force majeure declarations. In an NOC media release at the time, the state-owned company gave assurance of “readiness to provide all necessary support to resume their operations, as well as assisting them in facilitating the return, along with providing a safe working environment in cooperation with the civil and military authorities of the Libyan state”.
“This call comes considering the Corporation’s efforts to raise Force Majeure after following up an objective evaluation based on a realistic and logical analysis of the security situation, which has begun to improve dramatically, and led to the commencement of drilling works in sites where it was difficult to work in the recent past, in which there are now many global service companies”, added the December statement.
After BP and Eni’s decision, Norway’s Equinor ASA on October 17 signed a memorandum of understanding with the NOC to explore potential oil and gas development in Libyan waters, as announced by the NOC at the time.
That development was followed by Arabian Gulf Oil Co.’s start of production at the Misla oil field’s well DD21-80. Previously considered a non-producing well, the new project has been put onstream at a rate of 1,510 bpd, the NOC announced October 26.
In another milestone that followed the August announcement of the lifting of force majeure by the British and Italian energy giants, Austria’s OMV AG declared it will launch exploratory drilling in Libya February 2024, according to an NOC press release November 6.
Oil and gas operations in Libya have been hit by recurring blockades. World Bank estimated the Libyan economy had shrunk by 1.2 percent last year due to a blockade of oil production during the first semester. A country analysis by the USA Energy Information Administration published May 9, 2022 said due to political instability since the start of the civil war in 2011, Libya’s petroleum production has fallen from 1.7 million barrels of oil per day (MMbpd) between 2006 and 2010 to a maximum capacity of 1.3 MMbpd. The report cited repeated domestic oil blockades, among other factors.
The NOC is aiming to raise output to two MMbpd, it said announcing its approved plan for 2023-27 on March 30.
Early this year the NOC and Eni signed a deal to invest about $8 billion into “a strategic project aimed at increasing gas production to supply the Libyan domestic market as well as to ensure export to Europe”, as stated in an Eni announcement January 28. Targeted to come onstream 2026, the project has two structures with a combined gas production of up to 750 million standard cubic feet of gas per day.
Source: Rigzone