OMV strengthens position in Libya
Posted: 03 December 2007
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Central Europe's OMV has signed an agreement with the Libyan Oil Corporation to revise and upgrade several of its existing petroleum contracts to the newly established EPSA IV contractual framework.
A statement from the company said, the new agreement’s duration will be 30 years and will enable OMV and Occidental Petroleum to design and implement jointly with the Libya NOC some major fields redevelopments and exploration programmes for the jointly owned producing fields in the prolific Sirte Basin.
Planned investments of about $5 billion over the next 5 years for the redevelopment of producing oil fields and the expansion of exploration activities in the Sirte Basin.
The new agreement was signed by the Libyan National Oil Corporation (NOC) and Occidental Petroleum (OXY) and OMV, as partners in the international consortium. OXY and OMV will collectively - in a ratio of 75/25 - contribute 50% of the development capital and NOC will contribute the remaining 50%.
The signed agreement also provides a transfer of the agreements currently regulating the production entitlement in these oil fields, parts of which are more than 40 years old, into modern EPSA IV contracts corresponding to the new standards in Libya.
Depending on the specific field the international consortium will receive 10 or 12% of the gross production on an after-tax basis, according to the statement.
Both - OMV and OXY - have many years of success and outstanding know-how in the areas of production optimisation of mature oil fields. The companies intend to increase production from these fields from currently around 100,000 bbpd to about 300,000 bbpd.
The new contract also provides for a $1 billion signature bonus payable over three years reflecting the long-term participation in big oil fields and the access to high-quality oil reserves.
The investments are required to implement new technologies for increasing the recovery rate of existing oil fields and for additional exploration activities. With this step, OMV further strengthens its position in Libya, the most important country of its North African E&P core region, said the statement.
Helmut Langanger, OMV Executive Board member responsible for Exploration and Production, said: "OMV has been active in Libya since 1975, with production since 1985. Due to our in-depth knowledge of the potential and the conditions of this region, we will participate substantially in the redevelopment of the existing oil fields, as well as in new exploration activities. This agreement is an important step in strengthening our position in Libya, where we continue to grow further." |
