Libya to Redefine All Contracts with Oil Companies

YAOUNDE, Cameroon March 31, 2008 (Dow Jones Newswires)

The Libyan government says it will review all future contracts with oil companies in a bid to reap more benefit for the country, a senior Libyan government official told Dow Jones Newswires.

"Libya is going back to renegotiate all its oil contracts," Libya's national representative at the African Petroleum Producers' Association, Seddigui N. Ismail said in an interview at the APPA meeting in Yaounde last week.

"On completing the agreement with Repsol YPF, we can say that we have set the standards for old and new deals to be reached with old and new oil companies to operate in our country," he said referring to a deal with the Spanish oil company.

"The negotiations between Repsol YPF and the Libyan government are still on. We're still in talks and we're certain these agreements will be finalized in the nearest future. It could be next week, next month or so, but we're sure we'll get into new agreement with Repsol," he added.

Libya, he said, decided two years ago to redefine its oil industry, "because of the current world trend in the oil sector."

He noted: "Currently, it seems the international oil markets are in the hands of the petroleum-producing countries. This was the reverse in the 1980s when the oil companies controlled the markets."

The government official said Libya and oil companies had signed agreements some 20-25 years ago. "These agreements are supposed to expire any time from now, and we've to sign new agreements with Repsol YPF, Vintelsat and any other petroleum company."

These initial deals were signed at a 50-50% stake, but now, Libya is seeking a 72-20% stake; "with Libya having the 72% share in the agreement" he added.

"We're renegotiating these agreements because we still have oil in the ground. The sizes of our reservoirs and their oil potentials govern these new negotiations. Instead of saying that we don't want to continue in the deal, we prefer to sit down with the companies and discuss to regain Libya's advantage in the contracts."

He admitted: "Naturally the oil companies, like Repsol, will resent, but we believe that through negotiations, we'll come along".

Repsol YPF and Vintelsal are petroleum companies already operating in Libya.

The APPA meeting took place last week and brought together 14 African oil producers: Nigeria, Angola, Algeria, Libya and Chad, Congo, The Republic of Congo, Equatorial Guinea, Gabon, Egypt, South Africa, Benin, Ivory Coast and host Cameroon.

Sudan, Sao Tome & Principe, Ghana and Mauritania were invited as observers who could possibly raise APPA membership to 20, according to the body's president, Cameroon-born Adolphe Moudiki, executive general manager of the country's National Hydrocarbons Corporation, or SNH.

YAOUNDE, Cameroon March 31, 2008 (Dow Jones Newswires)


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