Libya Oil Head: BP Has Same Rights for Oil as New Gas Deal

VIENNA Jun 22, 2007 (Dow Jones Newswires)

Libya's oil policy head Shokri Ghanem said Friday that BP PLC (BP) will have the same rights for oil discoveries as it has for gas in the exploration and production deal signed last month.

In an interview with Dow Jones Newswires, Ghanem, who in effect leads the country's oil policy and is also Chief Executive of Libya's National Oil Co., said "it will be included, if they find oil it will be shared between us according to the same percentage as in the gas" contract. The deal covers "oil and gas offshore and onshore," he added.

On May 29, the Libyan national oil company and the U.K. oil major signed a natural gas exploration deal but the oil element hadn't been previously disclosed.

As part of the agreement, BP will have around 20% in the blocks located very deep offshore in the Sirte basin and onshore in the Ghadames basin.

"The next thing is the cabinet must approve (the deal) but this is a formality," Ghanem said Friday. "Then they have to come and pay the cash and start work.

"They're already organizing their teams. For practical reasons they've already started. They have a presence there," he added.

According to Abdalla El-Badri, who was chairman of the National Oil Company until the end of last year, BP may invest a total of $25 billion if it moves forward with all its plans. BP has declined to comment on this number.

"From the reports I hear from the company these are gas-prone areas, but there could be oil too," Ghanem said. "There is a strong potential for gas.

On oil, "I couldn't say no," he added.

Copyright (c) 2007 Dow Jones & Company, Inc.