Continental Focus, International Reach

BP and ENI to Partner in Libyan E&P

Tuesday, October 9, 2018

Libya’s state-run oil and gas firm, NOC, with BP and ENI, signed an agreement which is expected to lead to BP and ENI working together to resume exploration activities on a major E&P contract in the North African country.

The three signed a Letter of Intent (LoI) in London that calls for the parties to work towards ENI acquiring a 42.5% working interest in the BP-operated EPSA in Libya. On completion, ENI would also become operator of the EPSA. BP currently holds an 85% working interest in the EPSA, with the Libyan Investment Authority holding the remaining 15%.

ENI currently holds existing exploration and production activities and infrastructure adjacent to onshore areas of the EPSA. Transferring the operatorship creates the opportunity for the resumption of activity following completion of the transaction and relevant regulatory approvals.

NOC chairman Mustafa Sanalla commented: “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. The agreement’s social development guarantee is an important sign of our joint commitment to our staff and the communities in which we work. This initiative will hopefully drive further inward investment and facilitate higher production levels.”

Bob Dudley said: “This is 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.”

Claudio Descalzi said: “This is an important milestone that will help to unlock Libyan exploration potential by resuming EPSA operations that have remained suspended since 2014. It contributes towards creating an attractive investment environment in the country, aimed at restoring Libya’s production levels and reserve base by optimizing the use of existing Libyan infrastructure.”

The EPSA includes three contract areas, two in the onshore Ghadames basin and one in the offshore Sirt basin, covering a total area of around 54,000 sq km. Originally awarded in 2007, work on the EPSA has been suspended since 2014.

As part of the LoI, the signatories also reconfirmed their commitment to promote technical training and other social initiatives in Libya.

As set out in the LoI, the companies intend to finalize and complete all agreements by the end of this year, with a target of resuming exploration activities in 2019.