Exxon Mobil, Eni, Pertamina, win Libyan permits

Exxon Mobil, Eni, Pertamina, win Libyan permits

Maher Chmaytelli, Bloomberg/Tripoli

Italy's Eni Spa, Europe's fourth-biggest energy group, won the most number of permits to search for petroleum that were auctioned on Monday by Libya, holder of Africa's largest crude- oil reserves.

ExxonMobil Corp., the world's largest energy group, was the only U.S. firm to win acreage in Libya's second auction since oil was found there in 1959.

Eni took four permits, Japan's Mitsubishi Oil Co. also took four with partners, and BG Group Plc of the U.K took three alone and in association with others.

"It was very competitive," Prime Minister Shokri Ghanem told reporters after the session. "The Europeans and the Japanese were more aggressive this time."

The United States last year began lifting sanctions imposed in 1986 on Libya because of terrorism accusations, allowing for the return of U.S. companies.

Libya, the eighth-largest producer of the 11-member Organization of Petroleum Exporting Countries, seeks US$30 billion in investment to raise production this decade to three million barrels a day, from 1.7 million now, as rising demand for energy worldwide pushed crude-oil prices to a record of more than $70 a barrel on Aug. 30. The 19 winners in Monday's auction will have to share the production from any field found with Libya's state-owned National Oil Corp, to whom they will also pay signing bonuses totaling $103.4 million.

They got in return the right to search for oil and gas in an area covering 92,850 square kilometers, the size of Portugal. Libya chose the companies because they offered to keep the lowest percentage of any production for themselves.

The North African nation offered permits to search for oil and gas in 26 offshore and onshore plots. About 55 companies made bids for 23 plots, leaving three without any taker, two in the central region of Sirte and one in the eastern region of Cyrenaica.

U.S. groups Occidental Petroleum Corp, Chevron Corp. and Amerada Hess Corp. won alone or with others 11 of 15 permits offered in the first bidding round, in January. No company from Europe or Japan won acreage then. Before the auctions, Libya awarded blocks after talks with companies.

Successful bidders on Monday included Japan's two biggest oil explorers, Inpex Corp. and Japan Petroleum Exploration Corp.; its largest oil refiner, Nippon Oil Corp. and its biggest producer of natural gas from local fields, Teikoku Oil Co.

"Libya has a huge potential of reserves, that's why we were eager to obtain this opportunity," said Toshiya Oshita, Teikoku's manager for North Africa.

His company made the lowest bids in the auction, offering to keep only 7.5 percent of any production in two blocks of in the western area of Ghadames, giving the rest to the Libyan government. The highest successful bid was from China National Petroleum Corp, the nation's largest oil company, which will keep 28.5 percent of any production from an offshore plot it won.

In the first auction, the bids ranged between 10.8 percent and 38.9 percent and the signing bonuses reached $133 million for an area that was more than a third larger than the one contracted for the second auction.

"It was much more competitive this time," said Gisberto Liverani, exploration manager at Eni in Tripoli.

India's largest oil company, Oil and Natural Gas Corp., won acreage, as well as Indian Oil Corp., Oil India Ltd and Indonesia's state oil and gas company PT Pertamina.

European winners included Norway's Statoil ASA and Norsk Hydro ASA, Total SA of France and Turkish Petroleum. OAO Tatneft was the only of four Russian companies present in Tripoli to make a successful bid.

Libya, a country slightly larger than Alaska, has proven crude- oil reserves of 39 billion barrels, equivalent to over five years of U.S. consumption.

Libyan Energy Secretary Fathi Ben Shatwan told Bloomberg on Sept. 19 that potential reserves may top 100 billion barrels as only 30 percent of the territory is covered by agreements with oil companies.

Libya will hold four auctions in 2006 and 2007, offering exploration permits in 261 plots, National Oil Corp.'s head of planning, Tarek Hassan-Beck, told the World Petroleum Congress on Sept. 26 in Johannesburg.