BP and British Embassy pull staff as bombing hits Benghazi

 

 

The FCO and BP have both withdrawn staff from their operations in Libya in the last week, in response to uncertainty regarding the North African country's political and security situation. The British Embassy in Tripoli on Friday 10 May 2013 announced that a “small number” of staff who work in the Libyan ministries were being repatriated. Following the Embassy's example, and heeding advice given to them by the FCO, BP also announced that it was withdrawing a “small number” of non-essential staff as a “precautionary measure”.

 

The announcements come amid growing tensions in Libya. In recent weeks, a number of militias have besieged the foreign and justice ministries in the capital, seeking to ensure the Political Exclusion Law, an act preventing previous members of Qadhafi's government from taking office, is passed. Wanting a clean start to politics in post-revolutionary Libya, the rebels desire political office removed of the contemporaries of the man they fought to oust, however, the Law's opponents argue that these isolation provisions will deprive the country of substantial political and administrative know-how.

 

There have also been several bombings of police stations, the French Embassy and, most recently, of a hospital in Benghazi, one of a string of attacks in the eastern city. The car bomb struck the Jalaa hospital on 13 May 2013, killing nine and injuring dozens. It is the first such attack against civilian target, such as a hospital, in recent memory.

 

In January 2011, BP evacuated more than 400 staff from numerous locations inside Libya in response to the uprising that ousted Qadhafi from power. Despite this action, BP's largely offshore operations were mostly unaffected. At the same time, the British Embassy also evacuated its staff for two months.

 

For more news and expert analysis about Libya, please see Libya Focusand Libya Politics & Security.

 

© 2013 Menas Associates

BP to start operations in Libya

BP is to start oil and gas exploration in Libya, which the company suspended last year due to the popular uprising against Colonel Mu'ammar Qadhafi. On Tuesday 29 May, Libya's National Oil Corporation (NOC) chairman Nouri Berouin held a meeting with BP's deputy chief for exploration Michael Daly, at the NOC's headquarters.

The NOC released a statement saying: “During the meeting, BP announced the lifting of the state of force majeure starting on May 15, 2012, and a return to carry out exploratory activity at onshore and offshore areas belonging to it in Libya.”

For his part, Daly said: "The lifting of Force Majeure is a significant milestone in BP's plans to return to the exploration of onshore and offshore blocks in our existing EPSA contract. We look forward to working with the NOC and our partners in the Libyan Investment Authority to safely implement our drilling programme."

PB has no oil and gas production in Libya. In February 2011, it was preparing to start exploration in western Libya when it suspended the work because of the unrest. In 2007, the company signed a $900 million deal for exploration in the country and was planning to drill two wells, one offshore and one onshore.

Before the civil war, Libya was Africa's third-largest oil producer. Oil companies including Eni and Total have already resumed some of their output in Libya.

Sources: Reuters, BP, Bloomberg

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

Iraq's crude exports on the rise

The Head of the State Oil Marketing Organisation (SOMO) Falah Al-Amri has said that Iraq's crude oil exports rose to 1.912 million b/d in November compared with 1.900 million b/d in the previous month.

Al-Amari estimated that the country's crude oil production will increase further this month due to the rapid development of the oil fields in southern Iraq. He said that the Rumaila oil field, being developed by a consortium led by BP, has already began producing 1.100 million b/d from the previous production rate of 1.066 million b/d.

Over the last year, Iraq has signed several deals with international oil companies in a bid to boost crude oil production rates to 12 million b/d by 2017, from the current production rate of 2.35 million b/d.

Source: Dow Jones

For more news and expert analysis about Iraq, please see Iraq Focus.

BP finds gas in West Nile Delta

BP announced a sizeable gas discovery in the West Nile Delta. For BP and the world oil industry, the focus has been on the drilling in deepwater after the disaster of the Macondo well in the Gulf of Mexico. The Hodoa [“horseshoe”] discovery is about 80km northwest of Alexandria, in 1077m of water, and drilled to a depth of 6350m. It is the first discovery in the older deeper Oligocene geological structure in the West Nile Delta area. BP insists further appraisal is underway.

For Egypt, the well is vindication of its changed terms, finalised in July, that were to give BP greater incentive to develop fields. BP and other IOCs had argued that previous concession terms no longer justified the far higher production and development costs from very deep water which has been the focus of most recent exploration. Failure to reach satisfactory terms had led to a slowdown in production. This did not deter Minister of Petroleum Sameh Fahmi from declaring at every opportunity that Egypt had plentiful supplies of gas; a claim disputed not only by Egyptians suffering power cuts in the summer but foreign customers for piped gas or LNG unable to receive their contracted amounts.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Algeria's oil and gas exports up by 38.3 per cent

Algerian's oil and gas exports have gone up by 38.3 per cent in the first six months of 2010, said the country's Central Bank Governor Mohamed Laksaci. He also told the parliament that foreign companies operating Algeria gas exported lower quantities of energy in the first half of this year compared with 2009.

"(The value of) energy exports reached $27.6 billion in the first six months of 2010, an increase of $7.65 billion or 38.3 percent from the same period last year.The exported quantities remained stable. They increased only by 1.65 percent compared with their level in the first six months of 2009. This time (first half of 2010), the quantities exported by (foreign) partners declined," said Laksaci.

Total, BP, Amerada Hess, StatoilHydro and Anadarko are among the main foreign energy companies in Algeria, which is also the world's eighth biggest exporter of crude.

Laksaci said the earnings rise was made possible by higher oil prices, which he said averaged $77.5 per barrel during the January-June period this year versus $52.2 in 2009.

Source: Reuters

For more news and expert analysis about Algeria please see Algeria Focus and Algeria Politics & Security.

Security for companies working in Libya of interest to local authorities

The level of security for companies working in Libya remains a matter of acute interest to the local authorities. The likely withdrawal of a number of IOCs at the end of unsuccessful exploration programmes is recognised by Libya's senior planning agencies as an unwelcome setback to the economic development programme.

This will negatively affect Libya's principal economic sector, and considerably more exploration will need to be undertaken to ensure that reserve-to-production ratios do not fall significantly. The past six months - including the news of IOC withdrawals and soft world oil demand - have reinforced the pessimism for a strong surge in oil income for the immediate future.

It is interesting that NOC head, Dr Shukri Ghanem, was very sharp in making clear that the departure of IOCs was nothing unusual and that Occidental would remain for the time being. He was also at pains to assert that the long-term hydrocarbon development programmes are still on course. As noted last week, Shell's and BP's current exploration operations will be crucial. So far, BP remains convinced that its vitally important offshore drilling programme will begin before the end of the year. According to Ghanem, care has been taken to ensure that a repeat of the Gulf of Mexico oil spill will not occur.

The negative impact of the withdrawal of some IOCs should not be over emphasised. Indeed, the simultaneous presence of 47 IOCs in Libya was – because of many reasons, including its inadequate infrastructure and NOC's insufficient numbers of senior personnel who are able to negotiate with the IOCs – placing a severe strain on the country to cope with the influx. The income flows from oil ought, however, to be adequate to sustain the present level of activity both in oil and other key areas.

It must be expected that the security for the oil industry will continue to be enforced. Libya is well aware that its oil reserves position is fair but not good and that it needs to protect those overseas companies which remain inside the country.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2010 Menas Associates

Algeria launches third oil and gas licensing round

Algeria has launched its third oil and gas licensing round in hope of new investment for the country's energy industry. Previous bidding rounds in 2008 and 2009 were largely unsuccessful as international oil companies complained that the terms stipulated by Algeria's state oil company, Sonatrach, were too inflexible to be worth the risks.

According to energy industry insiders Sonatrach is unlikely to make major changes in its terms, but a lot will depend on which 10 blocks are put on offer. The contractual conditions will not be disclosed before 30th September and further "clarification meetings" will take place between October and December, with opening of the bids scheduled for 3rd March.

Sonatrach has a 51 per cent stake in all upstream operations and there's a tax on every barrel of oil sold at more than $30. It is estimated that Algeria has 12.27 billion barrels of oil reserves and 4.51 trillion cubic metres of natural gas reserves. Oil and gas account for 97.5 per cent of the country's export, making it the world's third largest exporter of liquefied petroleum gas, the fourth largest exporter of liquefied natural gas and ninth largest oil exporter.

According to online sources 70 international companies were qualified to bid in the forthcoming licensing round, including Exxon Mobil, Royal Dutch Shell, Total, Gazprom, BP, Repsol and Eni.

Source: UPI

For more news and expert analysis about Algeria please see Algeria Focus and Algeria Politics & Security.

Azerbaijan to supply gas to Bulgaria

A Bulgarian-Azerbaijani committee met in Baku this week to discuss the development of a Black Sea route to export natural gas from Azerbaijan to Bulgaria. The project is expected to be completed before 2013, said Bulgaeria's Bulgartransgaz director Ivan Drenovichki.

The committee discussed the options for shipping compressed natural gas to Bulgaria with the participation of Bulgartransgaz, SOCAR and the Shah Deniz consortium represented by Statoil, BP and Total. It is expected that Bulgaria will export some of the gas onward to other European detonations.

Once the all the work is completed Bulgaria is expected to be receiving two billion m³ of natural gas a year, securing as much as 50 per cent of its natural gas consumption with supplies from Azerbaijan.

Source: News Azerbaijan

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Mounting interest in BP's Nam Con Son assets

According to official reports several international oil producers, including China's CNOOC and Sinopec, Thailand's PTTEP and India's ONGC - already a partner of BP's in Vietnam, are taking an interest in BP's stake in the $1.3 billion Nam Con Son gas project offshore of Ho Chi Minh City.

BP has a significant presence in Vietnam and is the biggest foreign producer of natural gas. It also has a gas-fired power station and a pipeline. Collectively, BP's assets, known as Nam Con Son, constitute the largest gas project within the country.

It is thought that if Nam Con Son was to be auctioned off, it would generate a lot of interest particularly from Thailand and India. "We haven't looked at it yet as BP hasn't opened the bid officially. But (we) heard people say it wants to sell non-core assets,” said CEO of PTTEP, Anon Sirisaengtaksin.

BP has multiple partners in the Nam Con Son project, one of whom is state-run PetroVietnam. According to the British giant the Nam Con Son is worth $1.3 billion. The sale of these assets has been prompted by the ongoing clean-up operation in the Gulf of Mexico, which has now been estimated at $20 billion.

The Nam Con Son is a considered to be a lucrative venture and should generate interest among several of Asia's energy producers, particularly those eager to expand their operations in the Southeast Asia.

Source: Reuters

For more news and expert analysis about Vietnam, please see Vietnam Focus.

Egypt launches spill containment exercise

The oil spill in the Gulf of Mexico and the recent spill affecting the Egyptian tourist destination of Hurghada have prompted Egypt and the Saudi oil company Aramco to launch an oil spill containment exercise in an Alexandria port in November 2010.

Other sponsors of the exercise included BP, Shell, Aramco's shipping subsidiary Vela, and Egypt's Arab Petroleum Pipeline Company (SUMED).

The exercise will aim to test response to a big shipping spill in the Mediterranean Sea, and ensuring that Egypt has the right equipment and personnel to deal with any potential disaster.

There has been criticism of Egypt's response to the spill that affected Hurghada, pressuring the government to put in place measures and procedures to respond effectively to a larger spill if such an accident were to occur in the future.

BG Egypt said on Tuesday 6th July that it will invest US$2 billion to install a pipeline and drill new wells off Egypt's Mediterranean coast to help meet Egypt's growing demand for gas.

It expects the new offshore pipeline, its third in the West Delta concession, to be operational by the end of this year, allowing the firm to maintain its current production levels.

BG was one of six firms that won offshore oil and gas blocks in the Egyptian bidding process in the Mediterranean in February 2010.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Total stops gasoline supply to Tehran

Total has issued an official statement, saying that it has stopped gasoline sales to Iran, as a show of support for the international community's efforts to curtail Iran's nuclear programme. Total is the fourth western oil company, who has ceased doing business with the Islamic Republic.

The decision is thought to be linked to the fourth set of sanctions, approved by the US Congress, which constrict US companies supplying Iran with gas and conducting financial business transactions with key Iranian banks.

Industry experts have suggested that international suppliers of gas to Iran could be faced with curt restrictions to the US banking system, property transactions and foreign exchange, and are therefore intent to safeguard their own business interests.

Iran's dependency on gas imports is immense, due to insufficient refining capacity, and the impact of gasoline shortage has already been felt by the Iranian capital.

Shell, LUKOIL, BP, Reliance Industries and Glencore, are some of the companies that have either stopped fuel sales to Iran or intend to do so upon expiration of trading agreements. Repsol said it had pulled out of a contract it won with Shell to develop part of the South Pars gas field in Iran, and has no further plans to do business with the Islamic Republic.

Total who, up till recently, was still in negotiations with Tehran to take part in South Pars phase 11, has said that despite its, “interest in the South Pars 11 project,” the group “has not moved ahead with it” or sees any possibility to do so in the near future.

Source: Reuters

For more news and expert analysis about Iran please see Iran Strategic Focus.

BP gets the go-ahead from NOC

Shokri Ghanem, chairman of Libya's National Oil Corporation (NOC), has released an official statement, posted on the company's web site, confirming that BP will be allowed to continue drilling for oil and gas in Libya.

The statement comes just days after BP announced that it has, so far, spent over $2billion in trying to clear up the oil spill in the Gulf of Mexico. Talking about the Mexico spill, Ghanem said that the disaster will not change NOC's "confidence" in BP or stand in the way of the deep-water drilling progress in the country.

The Libyan government signed an agreement with BP, back in 2007, which gave BP permission to explore for gas along an offshore tract. In view of the recent troubles BP has encountered in Mexico, there had been talk, among industry insiders, that Libya might void the terms of consent. However, Ghanem has praised the company by saying it had, "huge capabilities, long-standing experience and high-standard abilities," and that it will therefore "overcome the crisis."

BP has stressed the fact that the work in the Gulf of Mexico is ongoing, and that the process of extracting oil is expected to improve in the coming days. BP also said it was too early to determine the total cost of the damage, caused by the oil platform explosion.

Source: Bloomberg BusinessWeek

To find out more about National Corporation Oil - Libya, please visit the National Corporation Oil web site, which you can find here.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.