Business | Oil & Gas
Libya turning the tables on big companies in scramble for access
Big oil firms are at the mercy of Libya's tough bargaining as they scramble for access to some of the last premium oilfields on offer.
- Reuters
- Published: 00:00 January 28, 2006
London: Big oil firms are at the mercy of Libya's tough bargaining as they scramble for access to some of the last premium oilfields on offer.
After years of international isolation, Libya could be gaining the upper hand in its quest to attract foreign investment as political barriers block off alternative territory and high prices drive the pursuit of oil.
Last year, it held its first two post-sanction international licensing rounds, which were praised for their transparency.
But cut-throat competition meant the winning terms were so aggressive companies could struggle to make a profit even with oil prices at well over $60 a barrel.
"For international oil companies, Libya is interesting because it's one of the only new frontiers and they can book reserves," said Valerie Marcel, an energy expert at the Royal Institute of International Affairs.
"Libya is a country with vast existing oil and gas reserves, but remains highly under-explored," said Craig McMahon, analyst at consultancy Wood Mackenzie.
Even the relatively well explored Sirte basin still had "significant potential", he said, adding that Libyan operating and development costs were relatively cheap.
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