Spanish oil firm Repsol is preparing to recommence drilling in Libya in early 2013, adding to signs that the country’s key industry is making a comeback following the 2011 civil war
The announcement was made by Repsol at the North Africa Oil & Gas Summit, which took place from 6-8 November 2012 in Vienna, Austria. The company said the first drilling would be carried out in the West Libyan Desert, with production now reported to have reached the pre-war level of 350,000 barrels per day (boepd), according to Reuters.
A Repsol spokesperson said, “We have ordered a new drilling rig and we will start as soon as that arrives, probably early next year.”
Libya, which is an Organisation of the Petroleum Exporting Countries (OPEC) member, has impressed analysts by increasing production levels more quickly than expected to around 1.6mn boepd. It has however had limited success in luring back security-conscious foreign firms, despite its proven crude oil reserves of 47bn barrels.
The deadly September 2012 attack on the US consulate in the eastern city of Benghazi is widely considered to have acted as a further deterrent for companies returning to the region, particularly in the case of US firms.
The relative caution of international oil companies contrasts with the speed with which Libyan oil workers resumed work, sometimes even before the end of the conflict, Reuters noted.
According to Abdul Nasser Fituri Zammit, chairman of Zueitina Oil, which works alongside US firm Occidental Petroleum, the slow return of companies could hamper the ability of Libya’s capacity to raise future output.
“Some of them have lifted their force majeures, but when it comes to actual work we have heard nothing,” he said, adding that the absence of construction and oil services companies was slowing down projects.
Libyan oil executives are hoping the Repsol decision as well as a commitment by BP to resume exploration will also encourage others to return.
“Exploration is still much less than before war. I hope the companies will be back early next year. Now it’s being done by (Algeria’s) Sonatrach and the National Oil Company (NOC),” said a source from the Libyan oil ministry.
They added that local oil companies linked to the NOC had four or five seismic teams in the desert and had begun drilling.
Meanwhile, an executive from the Polish Oil & Gas Company (PGNiG) said at the conference that it also had plans to drill three wells in Libya in 2013.
