Petroleum Africa
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Monday, July 29, 2013
The problems seen in North Africa since the launch of the Arab Spring continue and these problems are hitting these countries where it hurts a lot, the petroleum industry. The oil and gas sectors are two of the largest contributors to North Africa’s financial bottom line.
In Libya the country sees daily violence in Benghazi, protestors shutting in production at the Zueitina export terminal on a regular basis, and power shortages disrupting its production pumps.
While the report has not been confirmed, rumor has it that Marathon Oil Corp., a member of Libya’s largest foreign oil partnership Waha Oil Co., is contemplating selling its stake in the partnership. The company is partnered with fellow US firms ConocoPhillips and Hess Corp.
The company is not the first to review its holdings in this volatile region and won’t be the last as major firms are studying their options in countries like Algeria, Egypt, and Libya very carefully. BG said in its most recent report that it was reviewing further investments in Egypt due to the civil and political unrest the country has been seeing since former “dictator” Hosni Mubarak was ousted from office. Marathon’s partner in Libya, ConocoPhillips, announced late last year that it was exiting Algeria.
Marathon, if it does exit Libya, will most likely attribute it to a “realignment” of its priorities. The company has been focused on its domestic production which would be a safer bet all around for Marathon as it could make money at home and free itself of the inherent risk that comes with working in North Africa at this time.
The company also has assets in West Africa’s Equatorial Guinea and East Africa’s Kenya. At this time there has been no talk of exiting these two countries.
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