BREAKING NEWS: BP to slash Libyan plans report

By Nigel Ash

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London, 6 November 2013:

Security concerns have caused BP to pull back from a major Libyan investment in two onshore properties, abandoning a significant part of a planned $20 billion capital programme, according a report carried this evening by the Wall Street Journal.

BP is apparently negotiating the transfer of its stake in two Ghademes blocks to its partner, NOC subsidiary Agoco, and seeking instead to be simply the operator.

If the news is correct, then the move will be a further blow to the Libyan oil industry. Over and above the almost total shutdown of onshore oil production, oil companies are also struggling to bring in overseas maintenance firms, because of rising security concerns. BP s move also bodes ill for the planned new licensing round that has been mooted for some point next year.

The irony is that BP announced its lifting of force majeure and its return to Libya the very day after Shell said that it was suspending its operations and pulling out.

At the time, Shell itself cited security concerns, though it had also had poor drilling results. It also faced a capital investment of up to $450 million in the antiquated Brega LNG plant, which was no longer considered economic.

This May, BP, which had pulled all its staff out at the start of the Revolution said: Libya is now safe enough for us to resume operations .

It said that it would be drilling 17 wells as part of its Exploration and Production programme. The five planned offshore wells were to be in the Sirte Basin, where the firm had acquired 17,000 square kilometres of 3-D seismic.

The $2 billion deep-sea drilling programme was due to start this Septembe,r but has reportedly been delayed.

In addition BP announced that it was committed to 12 explorations wells in the Ghadames Basin where it had acquired 3-D seismic over 14,000 square kilometres.

The total investment would have averaged $1 billion a year for the next twenty years.

A BP spokesman contacted in London this evening said that there was currently no information available on the reports.

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