BP Negotiating with Libya to Supply LNG to North America & Europe

BP has opened discussions with Libya about a natural gas exploration and development deal that likely would involve a liquefied natural gas project to supply North American and European markets.

BP officials confirmed that it is negotiating a multibillion dollar deal with Libya but would not provide details. "We are continuing to look for opportunities in Libya and when we have a substantive agreement we hope to be able to announce it," the company said in a statement.

"From a BP perspective, Libya would provide additional supply to their portfolio and could go into some combination of the U.S., U.K., Spain and possibly even Italy in the future," said Frank Harris, an LNG analyst at Wood Mackenzie (Khalaf/Catan, Financial Times, Jan. 6).

In 1982, the United States banned companies from importing oil from Libya to the United States. And in 1986, the United States banned U.S. oil companies from operating in Libya. But last April, President Bush signed an executive order to ease sanctions against companies doing business in Libya, opening the country to American oil and natural gas investments. Energy Department estimates show Libya has at least 36 billion barrels of proven oil reserves worth more than $1 trillion.

Last month, Exxon Mobil signed an agreement with Libya to proceed with the exploration of offshore energy deposits in 2.5 million acres in the Cyrenaica Basin (Greenwire, Dec. 6). -- DRL

Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net 202/628-6500.