Egypt clearly is hot in the international arena, but the scene at its neighbor to the west – Libya – appears close to being equally spicy.
In fact, Libya captured the number two spot in the country rankings from the Fugro Robertson annual New Ventures Survey.
The oil companies’ interest in Libya has been on the upswing following the lifting in 2004 of economic sanctions imposed by the United States, which placed the country off limits to investments by domestic companies.
With its vast, largely unexplored areas, Libya has long been viewed as one of the most appealing exploration regions on the international scene. In fact, it harbors an estimated 36 billion barrels of high quality oil reserves, according to the EIA.
Adding to the appeal are relatively low production costs and geographic proximity to Western markets.
ExxonMobil is a high profile player in Libya – for the second time you might say.
Prior to merging, both Exxon and Mobil had been among the earliest players to enter Libya in the 1960s. Before exiting the country prior to the sanctions, total production between the two companies exceeded one million barrels per day, according to Russ Bellis, exploration director at ExxonMobil International.
The company re-entered Libya in 2005.
“Our objectives have not changed from what they were originally, which is to build a material presence and work with the Libyan National Oil Corporation (LNOC) to fully exploit, find and further develop hydrocarbon resources in Libya,” Bellis said.
“It’s a simple, broad-based strategy.”
‘A Plum Spot’
The company recently was awarded an Exploration and Production Sharing Agreement (EPSA) with the LNOC, which was ratified in June by the General People’s Congress, Bellis noted. The EPSA is for Contract Area 21 about 110 miles offshore in the Sirte Basin, which is said to be a world-class petroleum province.
Contract Area 21 is in water depths that range from 5,400 feet to 8,700 feet.
It’s likely a plum spot.
“Based on what’s remaining in the offshore area, our assessments would indicate it would have the most significant remaining undrilled potential,” Bellis said, “because it’s an untested block in the Libyan offshore.”
The company was given the green light to commence its now-completed 2-D seismic recording effort over the area prior to ratification of the EPSA. This enabled continuous shooting with the 2-D vessel used on Contract Area 20 just to the west.
The company currently is recording 3-D seismic on Area 20.
Meanwhile, Bellis noted they are awaiting results of their proprietary version of seabed logging recorded earlier in the year on Contract Areas 21 and 44, located off the country’s northeast coast.
“We have a deepwater drilling vessel contracted,” Bellis said, “and we’ll most likely drill two wildcat wells in late 2009 within the three Contract Areas we have.”
He gives kudos to the United States and Libya for making this activity possible.
“We’re very pleased with the progress that appears to be being made between Libya and the United States in terms of resolving the issues and coming to an agreement in terms of settlements for various historical activities,” Bellis said.
“It’s our desire to maintain a presence there for a long time.”