Italy's Eni SpA (NYSE: E) has agreed to buy half of BP Plc's (NYSE: BP) 85% stake in a Libyan oil and gas license with the aim of resuming exploration next year, the companies said Oct. 8.
Eni will acquire the 42.5% stake and become the operator of the exploration and production sharing agreement (EPSA) in Libya, in which the Libyan Investment Authority holds the remaining 15%.
The companies, along with state-owned National Oil Corp. (NOC), signed a letter of intent in London on Oct. 8 paving the way for the final deal. They did not disclose financial terms of the transaction.
NOC chairman Mustafa Sanalla said the agreement showed renewed confidence in the war-torn country's oil and gas sector.
"This agreement is a clear signal and recognition by the market of the opportunities Libya has to offer and will only serve to strengthen our production outlook," he said.
BP CEO Bob Dudley hailed the deal as an important step "towards returning to our work in Libya."
"We believe that working closely together with Eni and with Libya will allow us to bring forward restarting exploration in these promising areas," he said in the statement.
The resumption of exploration would help boost Libya's oil and gas output which fell sharply in the years following a civil war that started in 2011, Eni CEO Claudio Descalzi said.
Libya is producing around 1.25 million barrels per day (bbl/d) of oil, still below its pre-civil war capacity of 1.6 million bbl/d.
BP does not produce any oil or gas in Libya. It signed the EPSA agreement in 2007 to explore onshore in the Ghadames Basin and offshore in the Sirte Basin.
Its exploration program was interrupted in 2011 when the civil war broke out and remains under force majeure. In 2015, the company wrote off $432 million from its Libyan activities.
Eni, which has been operating in Libya since 1959, is currently active in six contract areas in Libya and its production in 2017 reached a record 384,000 barrels of oil equivalent per day.
The EPSA includes two onshore areas in the Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000 sq km (20,850 sq miles).
Recommended Reading
Fracturing’s Geometry Test
2024-02-12 - During SPE’s Hydraulic Fracturing Technical Conference, industry experts looked for answers to their biggest test – fracture geometry.
TGS, SLB to Conduct Engagement Phase 5 in GoM
2024-02-05 - TGS and SLB’s seventh program within the joint venture involves the acquisition of 157 Outer Continental Shelf blocks.
2023-2025 Subsea Tieback Round-Up
2024-02-06 - Here's a look at subsea tieback projects across the globe. The first in a two-part series, this report highlights some of the subsea tiebacks scheduled to be online by 2025.
StimStixx, Hunting Titan Partner on Well Perforation, Acidizing
2024-02-07 - The strategic partnership between StimStixx Technologies and Hunting Titan will increase well treatments and reduce costs, the companies said.
Tech Trends: QYSEA’s Artificially Intelligent Underwater Additions
2024-02-13 - Using their AI underwater image filtering algorithm, the QYSEA AI Diver Tracking allows the FIFISH ROV to identify a diver's movements and conducts real-time automatic analysis.