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Libya expects to attract $7 bln to up oil output

LONDON - Libya expects international oil companies to invest more than $7 billion and help find an extra 20 billion barrels of oil equivalent under a 10-year exploration master plan, its National Oil Corp. said on Thursday.

“An aggressive ... plan has been introduced to enhance oil production capabilities to levels close to those of the 70s,” said Hussein Seddiq, exploration manager at Libya’s NOC.

Production in the 1970s was more than three million barrels per day (bpd) compared with around 1.6 million bpd now.

“The target of the master plan is to discover 20 billion barrels of oil (equivalent) ... This is a very conservative estimate,” he said, adding that the 2005-2015 plan would focus on frontier and high-risk areas.

Libya’s oil licensing rounds are in part aimed at obtaining the exploration and production technology it was deprived of by decades of Western sanctions.

Seddiq was addressing a London roadshow, following an event in Tripoli last week, to launch the nation’s third international bidding round since the lifting of sanctions.

He said there would be four to five further exploration rounds offering a total of 220 blocks.

A first round offered 57 blocks, a second 44 and the third round, which is seeking bids by Sept. 9, is inviting proposals from foreign companies for 41 blocks.

The exploration master plan will call for the drilling of 50 exploration wells a year. The cost, including the shooting of thousands of square kilometres of two dimensional and three dimensional seismic surveys, would be around $4 billion.

The NOC says less than a third of Libya, Africa’s fourth largest country, has been explored for hydrocarbons. Its estimated reserves of 37 billion barrels so far have put it among the top 10 oil reserves owners.

Seddiq said that Libya’s wildcat success rate was 24 percent between 1957 and 2004, a rate described by one Western oil executive as impressive.

He added, without elaborating, that over the long term Libya, in partnership with international oil companies, expected to find more than 100 billion barrels of oil equivalent.

Western executives attending Thursday’s gathering gave mixed reactions to the presentation. Some said the acreage on offer was more high risk than in previous rounds but they praised the transparency of the bidding process.

They also voiced concerns that the terms could be punishing in the light of a trend for producing countries to work towards keeping a greater share of their energy wealth.

Of Seddiq’s hoped-for 20 billion barrels, one executive said: “Well it’s a sales pitch, isn’t it? You have a range of possible numbers and you’re going to obviously choose the strongest.”