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Woodside joins Libya's desert rat-race

Raising the dust: Woodside has beaten more than 140 companies to
win oil exploration rights in Libya, and will next month start its
drilling program.

Raising the dust: Woodside has beaten more than 140 companies to win oil exploration rights in Libya, and will next month start its drilling program.


By Barry Fitzgerald
December 30, 2005

NEXT month Perth-based Woodside is due to drill the first exploration well in a $US194 million ($A266 million) hunt for oil beneath the desert sands and gulf waters of Libya.

The country had been off limits to Western companies due to sanctions imposed by the US and the United Nations in the 1980s and 1990s in response to terrorist activities. Libya rejoined the international community in 2003 after agreeing to pay $US2.3 billion to the families of those killed in the 1988 bombing of a Pan American flight over Lockerbie in Scotland.

Woodside was among the first back into the country known for its big oilfields. Woodside's first exploration well is due to start late next month in a rapid-fire six-well program in the onshore Murzuq Basin, 1500 kilometres south-west of Tripoli.

Also, the first well in an initial seven-well program will be drilled in the onshore portion of the Sirte Basin on the other side of the country. The combined onshore program has been priced at more than $US100 million and has Woodside as 45 per cent partner and operator with Repsol and Hellenic Petroleum.

Libya has reserves of 36 billion barrels of oil, and it is estimated that another 35 billion barrels of oil remains to be found. Woodside has yet to detail the size of the oil targets it has identified beneath the Sahara's sand dunes, but its permits in the Murzuq and Sirte basins are very much in "elephant" country in oilfield terms. So much so that one of the fields in the Murzuq Basin where Woodside secured a large exploration block is actually called Elephant.

The AGIP-operated field ranks as a 700-million-barrel field, while a region to the west of the Woodside permit is home to Repsol's 380-million-barrel El Sharara A and its 350-million-barrel El Sharara fields.

In the onshore portion of the Sirte Basin, Woodside's five exploration blocks are surrounded by several monster fields, including the 5-billion-barrel Gialo field, the 4.2-billion-barrel Amal field and the 2.5-billion-barrel Zelten field.

Woodside's agreement with the Libyan National Oil Corporation followed the normalisation of diplomatic relations between Australia and Libya.

Woodside has since expanded its exploration effort in Libya by successfully bidding for four blocks in the offshore portion of the Sirte Basin. Four exploration wells are expected to be drilled up to 100 kilometres offshore from Tripoli starting late next year.

The offshore program has been priced at $US94 million. Woodside's partners are US group Occidental returning to Libya after abandoning its oil production interests there due to the US Government's 1986 embargo and an arm of the Abu Dhabi Government.

Woodside beat competition from more than 140 mainly US oil and gas companies for the prized exploration ground in the oil-rich African nation.

The Libyan Government will take anywhere from 10.8 to 38.9 per cent of the oil and gas pumped from any developments on the permits by the foreign companies, the return of which is part of the plan by Libyan leader Colonel Muammar Gaddafi to double the nation's oil output this decade.

Woodside shares rose 36 to $38.95 yesterday. The group's Libyan exploration is eagerly awaited by the local market, but the gain was more of a response to an overnight move in oil prices to more than $US60 a barrel. The stock is set to close the year sporting a 96 per cent gain.

This reflects the impact of the oil price spike on group earnings; the effect that the boom in Asian demand for liquefied natural gas is having on expansion plans at the group's one-sixth-owned North-West Shelf gas project; and Woodside's plan for the rapid development of its wholly owned Pluto LNG project.

source: http://www.theage.com.au/news/business/woodside-joins-libyas-desert-ratrace/2005/12/29/1135732693430.html

 

 


 

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