This week, prominence has been given to a speech made at an oil
conference in early September by OMV's Senior Vice President Dr
David Latin. He indicated that the Libyan oil industry was
capable of making a rapid recovery and suggested that the replacement of damaged
plant and equipment had been achieved with extreme success. He quoted official
Libyan sources in showing that oil production had recovered very rapidly to over
1.5 million b/d and had stabilised at virtually pre-war levels.
At the same time, however, with the political environment still
evolving after the Arab Spring in a number of countries including Libya, Tunisia
and Egypt, newly appointed officials are still finding their feet. Dr Latin
stressed the importance of rapid decision-making by the governments as being one
of the key challenges faced by OMV and other IOCs in the midst of all the
ambiguity. In addition, he also stressed that security has to be managed
particularly carefully in Libya and Tunisia. Libya is currently unable to take
best advantage of market conditions because it lacks the underpinning of
technical and financial strength.
Latin looked forward to a pick-up in business in the next six
months and foresaw offshore oil and gas becoming of increasing interest to
foreign companies. Offshore exploration obviously has less of the security and
stakeholder issues that affect onshore operations. So far, however, Libya's new
offshore exploration has, with the exception of Hess' gas discovery, been both
extremely expensive and singularly unsuccessful in recent years.
As noted last week, on 4 September there was a gas leak and
minor fire at the Amal oilfield in the eastern Sirte basin. Harouge Oil – the
joint venture between NOC and Suncor Energy's Petro-Canada subsidiary – operates
the field. The fire injured four people but was quickly extinguished, although
crude output was disrupted.
For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.
© 2012 Menas Associates
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