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Libya announces 900 mln dlr gas deal with BP
AFP Photo/Leon Neal
Britain's Prime Minister Tony Blair, left, with Libyan leader Moammar Gadhafi, right,
at his desert base outside Sirte south of Tripoli, Tuesday May 29, 2007
AFP
TRIPOLI
Petroleumworld.com 05 30 07Libya announced on Tuesday it will sign a 900 million dollar exploration deal with British energy giant BP, which London says plans to return the north African country after a 33 year absence.
"We are going to sign with BP an oil exploration and prospecting accord on Libyan territory worth 900 million dollars," said the head of Libya's National Oil Corporation Shokri Ghanem.
Later he clarified that the agreement focused solely on gas prospecting in the Sirte region 500 kilometres (310 miles) east of Tripoli and at Ghdamess 700 kilometres (435 miles) south of the capital.
The announcement came ahead of a visit to the oil-rich nation by British Prime Minister Tony Blair who is starting a tour of Africa before he leaves office next month.
"BP will be announcing that they're going back into Libya," a spokesman for Blair said, confirming that the outgoing premier was due to hold talks with Libyan leader Moamer Kadhafi.
"Negotiations are ongoing and a deal could be signed later today," a spokeswoman for BP in London told AFP, specifying that the company was only involved in negotiations about gas, not oil.
A BP spokesman said earlier that "for the past couple of years we have been in discussions with the Libyan authorities regarding possible opportunities in gas in the country."
An energy industry source, speaking to AFP on condition of anonymity, said the deal "is primarily gas. But obviously until they start digging and doing tests, they're not quite sure what else they might find. It might be oil, it could well be gas, but primarily it's gas."
OPEC member Libya is the African continent's second largest oil producer at 1.7 million barrels per day. It also has natural gas reserves estimated at 1,314 billion cubic metres.
The Financial Times reported in January 2006 that BP had entered negotiations over a multi-billion dollar gas exploration and development agreement in Libya.
It said discussions involved a liquefied natural gas project that could supply the North American or European markets.
Libya is seeking massive investment to boost its energy sector, whose development was stunted under UN sanctions imposed after a US airliner was downed in 1988 by a bomb over the Scottish town of Lockerbie, killing 270 people.
AFP 29 1648 GMT 05 07
Copyright© 2007 AFP. All Rights Reserved.
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