Libya’s Oil and Gas Minister, Mohammed Oun, has accused some international oil companies (IOCs) operating in Libya of taking advantage of lax security in the country’s restive oil regions caught in fighting bouts since 2011, slacking off in implementing their development plans and seeking better contractual terms.
Oun told S&P Global that most of the IOCs had committed to specific projects and up till now they didn’t act as they should have, adding that since 2008, all companies have submitted programs to develop whatever they have discovered and execute the remaining exploration and seismic surveys.
“Because of the circumstances in the country since 2011, there is a lot of slack from IOCs in executing their commitments in the exploration and production sharing agreements.” Oun said.
He added that IOCs that haven’t executed their commitments need to relinquish their concessions and hand them back to NOC, which should award them to other companies, saying that IOCs are also exploiting Libya’s need for petrodollar revenue and foreign expertise to develop its resources to exact better contractual terms from NOC.
“TotalEnergies and ConocoPhillips are renegotiating with NOC to double their paid cost to 13% from 6.5% in the current agreement, without involving the oil ministry in these talks. I am totally surprised and astonished by the request of TotalEnergies and ConocoPhillips to double this percentage because it (the current 6.5% percentage) was a temporary measure,” said Oun, who has been involved in Libya’s oil sector since 1974, with stints at Occidental and NOC until being appointed oil minister in 2021.
“With fields discovered years ago and the potential of Waha, they can double production.” Oun added, knowing that Waha Oil Co., majority owned by NOC, produces more than 300,000 bpd.
Oun said that requests by TotalEnergies and ConocoPhillips to renegotiate their contractual terms come after Eni managed to increase its percentage in a deal with NOC signed in January to develop offshore Structures A&E.
“The Eni-NOC deal violates a number of laws because it raises the Italian company’s paid percentage to 37% from 30% previously. The 25-year agreement is the largest such energy deal for Libya in more than a quarter of a century, with the offshore blocks having confirmed gas reserves of about 6 Tcf. Eni’s renegotiations with NOC have opened the doors” for other IOCs to request similar changes.” Oun said.
Oun also is critical of NOC’s talks with Eni, Total Energies and UAE-based Abu Dhabi National Oil Co. to develop Hamada gas field after getting pre-approval to initiate negotiations from the High Council for Energy Affairs. He indicated that he had submitted in 2022 a proposal to the cabinet to fast-track the development of Hamada and Arous Al Bahr fields, but then NOC went to the council and secured pre-approval for its talks.
