Monday, January 28, 2013

BP Reviews Plans for Libya Drilling

BP reviews Libya drilling plans

Sun, Jan 27 2013

LONDON (Reuters) - BP (BP.L: Quote, Profile, Research) said it was reconsidering plans to drill for oil in Libya due to heightened security fears following an attack by Islamist militants on a gas plant in neighbouring Algeria earlier this month

"We had expected to restart drilling at the end of the second quarter this year, but we're currently reviewing our plans," a BP spokesperson said on Sunday.

BP had been due to resume exploratory drilling that was suspended during civil unrest that led to the overthrow of former Libyan leader Muammar Gaddafi in 2011.

Islamist militants took dozens of workers hostage at the Tigantourine gas complex in eastern Algeria, and 38 were killed when Algerian forces stormed the plant on January 17.

(Reporting by Myles Neligan; Editing by Alison Birrane)

BP reconsidering its return to Libya

Tripoli, 27 January 2013

BP has confirmed that it is reconsidering its decision this Spring to resume its exploration programme in Libya The move comes in the wake of the attack on the Tigantourine gas plant near In Amenas in Algeria earlier this month, in which 36 oil workers were killed, including a number of BP employees.

At the end of last May, BP announced that had reached an agreement with the National Oil Company and was resuming its exploration in Libya. The news came only a day after Shell said it was suspending its Libyan operations and paying off its local staff. One reason Shell gave for withdrawing was concerns over security.

BP had hesitated for some months about picking up its exploration programme under a $900 million deal signed in 2009, which was suspended at the start of the revolution.

Until February 2011, BP had shot 3D seismic over offshore blocks in the Sirte Basin and onshore in the Ghadames basin, covering an area of 31,000 square kilometres. Its original Exploration and Production Sharing Agreement (EPSA) contract with NOC, signed in December 2007, included a commitment for five offshore and 12 onshore wells.

The deal struck with NOC in May, included a provision that BP would be compensated for losses after it had declared Force Majeure 16 months earlier.

At the signing ceremony with NOC chairman Nuri Berruien, BP’s Executive Vice-President for Exploration, Dr Michael Daly declared the Force Majeure lifting as a significant milestone for his company in Libya. He went on to say: “We look forward to working with the NOC and our partners in the Libyan Investment Authority, to safely implement our drilling programme.”

It is concerns over that safety that are clearly now causing BP to review its decision.

Drilling is not actually due to resume until this September. During the Algerian attack, the UK oil firm told Libya Herald, that it was reviewing its security in Libya but at present, still had very few expatriates on the ground here.

BP’s second thoughts may also have been influenced by the UK government’s urgent advice last Thursday, that all British citizens should quit Benghazi immediately, because of an imminent threat, and that no one should go to Libya except on essential business.

London’s warning echoed a 6 January travel advisory from Washington for US citizens and has since been followed by Canada, Germany and the Netherlands. These moves have caused some anger and much frustration within the Zeidan government.

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