Wintershall Aktiengesellschaft (WIAG), a crude oil and natural gas producer, and Libya’s National Oil Corporation (NOC) have signed two exploration and production sharing agreements (EPSAs) for Areas 91 (former Concession 96) and 107 (former Concession 97) in the onshore Sirte Basin
Prior to the signing, the Libyan Government had ratified the EPSAs, allowing for immediate entry into force.
The parties agreed to convert WIAG’s Concessions 96 and 97 to the latest EPSA IV contractual standard, taking retroactive economic effect as of 1 January 2008.
By converting the concessions to EPSAs, the terms of the EPSA for Area 91 shall last until 2036 and the terms of the EPSA for Area 107 shall last until 2037.
WIAG and NOC will establish a joint operating company (JOC) named ‘Sarir Oil Operations’ (51 per cent NOC, 49 per cent WIAG) that following a transitional six-month period of continued WIAG operatorship shall assume operational responsibility in both contract areas.
Pursuant to this agreement, WIAG will carry out exploration work, including drilling two wildcat wells in Area 107 and one in Area 91.
WIAG will also pay a US$100mn signature bonus for the two agreements in addition to US$50mn over a period of 10 years for corporate social responsibility and sustainable development programmes and projects which will be managed by NOC.
NOC and WIAG are confident to build a JOC that will operate the fields in a reliable manner and in accordance with good oilfield practices.
NOC Chairman Mustafa Sanalla said, “NOC is proud to be a true and faithful guardian of the oil wealth to the Libyan people. We are pleased to start a new chapter of cooperation with WIAG, which has been operating in the Sirte Basin since 1966.”
