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U.S. Oil Firms Set to Reenter Libya

August 17, 2004|From Bloomberg News

Libya on Monday offered 15 sites for oil and gas exploration for its first auction of licenses since U.S. sanctions were lifted.

For the first time since the mid-1980s, U.S. oil companies will be able to bid against European rivals for Libyan exploration and production-sharing agreements. Bids are due Jan. 10, and agreements may be signed later that month, state-owned National Oil Corp. said on its website.

"We will participate in the bid rounds," said Larry Meriage, a spokesman for Los Angeles-based Occidental Petroleum Corp. "We look at Libya as an important place to be."

Libya produced 1.6 million barrels of crude oil a day last month. The country is eager for foreign investment to boost revenue from oil exports in competition with other members of the Organization of the Petroleum Exporting Countries, such as Algeria, Iraq and Nigeria.

U.S. firms were forced to leave Libya in 1986. Their return was made possible by the ending of U.S. sanctions in April as a reward for Libya's decision to cease efforts to build a nuclear weapon. United Nations sanctions had already ended.

Before 1986, the Oasis Group, a joint venture that currently consists of Amerada Hess Corp., Marathon Oil Corp. and ConocoPhillips, accounted for about half of the country's output. Occidental also produced oil there.

"We're interested in returning to Libya as part of the Oasis Group and other areas as well," said Jay Wilson, a spokesman for New York-based Amerada Hess. "I'm sure we'll be evaluating additional opportunities in the country."

Prospective bidders will be able to view data on the Libyan exploration blocks Oct. 20 through 29 at the Libyan oil company's offices in Tripoli.

ChevronTexaco Corp. also expressed interest in the offering.

"We are planning to attend the presentation and discussion on contractual framework" for the bidding, ChevronTexaco spokesman Stan Luckoski said.

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