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.