Ibrahim A. El Mayet
The Industry is currently facing structural reforms and reviewing policy issues.
Previously the NOC was responsible for both setting policy and conducting commercial operations.
Responsibility for setting policy and conducting audits has been transferred to the Ministry. The Ministry of Oil & Gas is currently housed within the NOCs Headquarters in Tripoli and is currently in the process of recruiting staff and establishing its operational capacity and independence under Minister Abdulbari Al Arusi.
Calls for the NOC to be returned to Benghazi continue and pressure is increasing on the Ministry of Oil to take action on this issue.
According to Ministry sources the plans to create the two companies have been broadly accepted and are likely to proceed.
Initiatives launched by Interior Minister Ashour Shweil have already proved to be effective in recruiting members of the Supreme Security Council (SSC) and other militias to join the Police.
More than 28,000 have already applied to join the security forces while thousands will be sent to universities and colleges to continue their education. Taking the approach of engaging with tribal elders and respected religious clerics has a good chance of succeeding.
These combined efforts could improve the outlook for Benghazi and Libya as a whole in 2013 2014.
Production Targets
No new plans have yet been issued officially by the NOC. The NOCs 2010 2014 development plan targeted production of 2.1 million bpd by 2014 to be achieved through increased drilling activity and investment to increase production at 27 producing fields. Official sources suggest a target of 2 million bpd over the next five years, which given current constraints is still ambitious. Some industry sources do not expect any significant movement or major projects until the election of a permanent government in 2013 14. The NOC is focused on current priorities including the consolidation and increase of production to pre-conflict levels and beyond, the restructuring of the industry, reviewing and updating contracts and reviewing legal framework.
Delays to routine and non-routine maintenance in 2012, could cause production to stagnate or even fall slightly in 2013.
Company
Production (bpd)
% of total output
Eni
Wintershall Total
108,000
100,000 55,000 50,000 47,000 46,000 35,000 22,000 33,000
6.4%
5.9% 3.2% 2.9% 2.8% 2.7% 2.1% 1.3% 1.9%
OMV
Occidental
Total
13,000
509,000
0.8%
29.9%
March 2013 - Mellitah Oil & Gas Complex was forced to temporarily shut down operations due to fighting between rival militias from Zintan and Zwara.
Exploration
Libya remains relatively underexplored only about 30% of the Country has been allocated in exploration blocks, and even large areas of some allocated blocks remain unexplored.
Studies of Libyas main basins indicate that at least 300 billion barrels of oil have been generated. Only half of that has been discovered to date.
About 58% (798,487 Km) of the basins area (mostly of Sirte Basin) is under exploration & production licenses.
Exploration Cont.
Most exploration activity has been on hold as the majority of International operators and service companies are yet to return to Libya.
However the industry is not at a complete standstill with NOC companies and some IOC partners continuing to work.
There is currently a high demand for drilling in Libya which is not being sufficiently supplied. There is a shortage of rigs as several rigs were stolen and many existing rigs are not operational requiring maintenance, assembly and inspection.
Members of the PFG are Soldiers and receive salary from the MoD (although funds come from the NOC budget)
The Authority has 5 regional branches covering the major oil assets each with its own local commander, administration and resources.
The PFG currently has armed mobile and fixed teams deployed.
Downstream Development
Libya currently has 5 refineries with a combined capacity of 378,000 bpd. According to the NOCs 2010 2014 development plan a total of $11 billion was allocated to maintain and increase capacity at refineries and develop petrochemical infrastructure.
Refinery Zawia Ras Lanuf Marsa El Brega Sahrir Tobruk Total Capacity (bpd) 120,000 220,000 8,000 10,000 20,000 378,000 Status Operational Operational Operational Operational Operational
In January 2013 Oil Minister Abdulbari Alarusi revealed plans to establish new petrochemical plants, including the establishment of ammonia and urea plants in the Eastern city of Ajdabiya to feed the eastern region. It is hoped that the plant will help to create new jobs for people in the area of Ajdabiya and Zueitina. Also under discussion is the expansion of Zawia port and refinery to increase its commercial capacity.
Gas
Gas reserves are estimated at 54.7 TCF. In January gas production reached 2.3 billion cubic feet per day.
Under existing agreements: 850 million cf is exported to Italy. 800 million cf of gas is used to supply the electricity sector, cement and water desalination 650 million cf of gas is distributed to companies to supply oil fields and ports with electricity.
It is estimated that 2.3 million cubic feet per day of gas is currently flared; Oil Minister Alarusi stated that the Ministry is looking to create projects to take advantage of these quantities.
Setting up in Libya
It is mandatory for International Companies to establish a local presence in order to provide goods and services in Libya.
Representative Office
A representative office gives a company a legal status in Libya allowing it to conduct market research and promotional activities.
Branch Office
100% foreign owned The capital required is LYD250,000 (approximately 125,000) The license lasts for 5 years and can be renewed an unlimited number of times. A branch office is obliged to appoint a Libyan national as either Manager or Deputy Manager and to source materials and supplies locally where available. Branches can only conduct a limited range of activities within certain sectors namely, contracting and civil works, electricity, Oil, telecoms, industry, consultancy, environmental protection, IT and health.
Drilling and maintenance of oilfields and the installation and maintenance of oil drilling equipment and plunging pumps.
Civil Works building tanks, laying pipes and building pipelines for carrying and pumping oil and gas and conducting maintenance works.