Energy giant Royal Dutch/Shell on Tuesday announced a long-term deal with Libya to explore for gas in the North African country.
The deal follows an agreement between Shell and the Libyan government 13 months ago to establish a long-term strategic partnership following the former pariah state’s return from an international wilderness.
”The National Oil Corporation of the Great Socialist Peoples Libyan Arab Jamahiriya [NOC] and Shell Exploration and Production Libya have reached a long-term agreement for a major gas exploration and development deal,” a statement issued by Shell said.
”The agreement covers the rejuvenation and upgrade of the existing liquefied natural gas [LNG] plant at Marsa Al-Brega on the Libyan coast, together with exploration and development of five areas located in the heart of Libya’s major oil- and gas-producing Sirte Basin.”
Libya is seeking massive investment to boost its energy sector, whose development was stunted under international sanctions imposed following the bombing of a Pan Am passenger jet over Lockerbie, Scotland, in 1988.
Under the agreement, Shell said it will rejuvenate and upgrade the Marsa Al-Brega LNG plant at a minimum cost of $105-million, rising possibly to $450-million, which will in turn raise the plant output from 700 000 tonnes to about 3,2-million tonnes a year.
Subject to gas availability, Shell said it will also undertake jointly with the NOC the development of a new LNG facility.
The agreement grants Shell gas-exploration rights in five blocks, covering about 20 000 square kilometres at a minimum commitment cost of $187-million, with the programme beginning immediately.
”We are delighted to be back in Libya and honoured to work together with the NOC to develop a modern LNG industry, and explore for and develop gas in the prolific Sirte Basin,” said Shell’s executive director for exploration and production, Malcolm Brinded.
”Libya’s integrated gas industry has enormous potential, based on its large gas resources and favourable geographic location. I look forward to our cooperation and believe that this is the beginning of a new, lasting and fruitful partnership with Libya.”
In March last year, Shell and the NOC signed an agreement in Tripoli, to coincide with a visit to Libya’s capital by British Prime Minister Tony Blair that reflected thawing relations between the two countries.
Libya was last year welcomed back into the international fold by London and Washington after Tripoli renounced its pursuit of weapons of mass destruction in December 2003. Washington lifted most economic sanctions on Libya last September. — Sapa-AFP