The agreement, over 30 years with an initial six-year exploration phase, was signed on Sunday, November 30, 2003, in Tripoli and covers five exploration blocks in the onshore Sirte Basin in northern Libya and one in the onshore Murzuq Basin in western Libya.
The minimum exploration work commitment will involve geological studies, seismic acquisition, and 13 exploration wells over six years. Included in the work commitment is a three-year feasibility study for the development of a remote field in the Murzuq Basin.
This study includes an option to negotiate an agreement for the appraisal and development of this remote field within a further three years.
Woodside has a 45% interest in the exploration and production sharing agreement, Repsol 35%, and Hellenic Petroleum 20%. Woodside is operator.
The three companies have also agreed to work together on marketing commercial quantities of gas that might be discovered.
The cost of the joint venture's total work program with the Libyan National Oil Corporation is over US$100 million with Woodside's average yearly expenditure over this period expected to be about US$8 million.
Woodside's New Ventures Director, Agu Kantsler, said the agreement was another step in Woodside's strategy of building a balanced portfolio across the key focus regions of Australia, the United States and Africa.
"This is the culmination of a long-term engagement of the Libyan National Oil Corporation and we are delighted to be the first Australian energy company to be welcomed into Libya since the normalization of diplomatic relations between our two countries in mid-2002," Dr Kantsler said.
"Libya is one of the world's most prolific oil and gas provinces with proven reserves of about 29.5 billion barrels of oil and 46.4 trillion cubic feet of gas.
"This agreement will provide Woodside and its partners with access to 20,000 sq km of highly attractive acreage with excellent oil and gas potential in two basins which, together, have an undiscovered potential of 35 billion barrels."
Dr. Kantsler said several of the world's major international oil and gas companies, including Repsol, Agip of Italy, Total of France, Wintershall of Germany, and Petro-Canada are active in Libya. Repsol YPF and RWE of Germany have also recently been awarded new exploration contracts.
"We are delighted to be joined by Repsol and Hellenic Petroleum in this venture, particularly as they bring their significant presence in the European energy market and their experience in Libya," he said.
"Libya has significant remaining and undiscovered potential and we are confident that this agreement will enable us to add value to our portfolio of exploration prospects for drilling from 2005.
"This move is a logical extension of our North African activities and is consistent with our exploration strategy."
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