London, United Kingdom | – North Africa oil-rich Libya hopes to offer more flexible and less punitive oil licenses next year, based on a new petroleum laws currently being drafted, the chairman of Libya’s national oil company said Thursday.
International oil companies operating in Libya and potential investors in the oil and gas industry frequently complain that punitive contractual terms, on top of serious security issues, are a barrier to investing in Libya’s vast oil resources.
Libya’s NOC new chairman Mustafa Sanallah addressing the3rd New Libya Oil & Gas Forum 2014 in London said, that “once the draft [of a new oil law] is ready and we have a permanent government, we will do a new bidding round.”
“Hopefully by next year the situation will be very clear,” he said.
Najme Karim, who is in charge of the committee overseeing the preparation of the new law, said the legislation is designed to make contracts more flexible, particularly for non-conventional and deep water reservoirs.
However, violence has escalated in Libya as conflict between government forces and rebels has increased. Militants loyal to renegade general Khalifa Haftar are disputing the legitimacy of the current, Islamist-backed government.
Gunmen loyal to him attacked the parliament building in Tripoli two weeks ago to demand a power transfer and Thursday bombed Islamist strongholds in Eastern Libya.
Also speaking at the forum, Mounir Bouaziz, a Middle-East vice president at Royal Dutch Shell Plc, confirmed stringent contractual terms were a key factor in the company’s decision to relinquish Libyan blocks two years ago.
“We are engaging with the Libyans” over a possible re-entry in the country’s acreage, he said. Though security will be a factor, any bidding also “depends on the petroleum law,” Mr. Bouaziz added.
Following two outstanding and highly successful events, the 3rd New Libya Oil & Gas Forum continues tomorrow with a keynote speech and panel discussion on how to encourage and ensure secure investment in the Upstream and Downstream hydrocarbon sector of Libya and putting Libya first on the production map.
NOGTEC is a media partner to the conference being held in London from the 29th – 30th May 2014.