Oil Majors Halt Drilling Ops in Libya

Libya, North Africa
(Click to Enlarge)

LONDON (Dow Jones Newswires), Feb. 21, 2011

BP said Monday it was suspending preparations to drill in the Libyan desert as its contractors pull out due to unrest in the country.

The move could be a blow for the U.K. oil giant, which in 2007 signed a deal worth at least $900 million to explore in Libya, saying at the time it was its largest single exploration commitment.

Its offshore operations are continuing as normal.

Libya, an important member of the Organization of Petroleum Exporting Countries, normally produces about 1.6 million barrels a day of crude--the equivalent of about 2% of global oil demand.

Some companies have already pulled some of their staff from the country.

Norwegian oil giant Statoil said it was closing its office. But others said business continued as normal.

A spokesman for BP said "some [drilling contractors] that are working there are being evacuated as a precaution" from the onshore operation.

"We are suspending preparations" for drilling in the south western Ghadames basin, which was planned to start around this spring, he said. The acreage is expected to be rich in natural gas.

But the BP spokesman said offshore seismic work "is still going on" in the Sirte basin where the company is due to start drilling by the end of June.

He also said BP is "making plans to evacuate" some non-essential staff.

Austria's OMV and Germany's RWE's exploration unit RWE Dea said they had already withdrawn some staff from the country.

A Statoil spokesman said "a handful of expats...are leaving the country due to the current situation."

"We have decided to close the office in Tripoli," he said. The company is a partner in fields but doesn't operate them.He didn't specify how long the office would be shut.

Shell said it had "temporarily relocated the dependents of expatriate staff outside Libya."

However, France's Total, Gazprom of Russia, Repsol of Spain and Eni of Italy said their operations were not affected by the turmoil. Gazprom and Eni said no staff have been evacuated while Total said all measures have been taken to ensure the safety of its employees.

"As of today [Monday], 1100, operations and production are normal," Total spokesman Florent Segura told Dow Jones Newswires in a telephone interview. He declined to give any further comment.

Copyright (c) 2011 Dow Jones & Company, Inc.

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