By Maher Chmaytelli and Nicholas Comfort
March 3 (Bloomberg) -- Libya urged ConocoPhillips, Hess Corp. and Marathon Oil Corp. to agree to lower their share of production from the Waha oil venture as state revenue is squeezed by lower crude prices and OPEC-mandated output cuts.
The government is seeking to speed up talks with the three U.S. companies and Germany’s Wintershall AG following similar discussions with other international explorers, state-run National Oil Corp. said on its Web site, citing a Feb. 28 decision by Libya’s Oil & Natural Gas Council.
National Oil Chairman Shokri Ghanem said last year that Libya sought to cut foreign producers’ oil take to less than 20 percent, from as much as 49 percent. Libya has already revised contracts with Eni SpA, Occidental Petroleum Corp., OMV AG, Petro-Canada and Repsol YPF SA.
“The council agreed that negotiations should continue with the companies that are still procrastinating in approving the contractual changes proposed by National Oil,” the state producer said.
ConocoPhillips and Marathon each hold 16.33 percent of Waha, also known as Oasis, and Hess has 8.17 percent. The stakes were granted under a 2005 accord that allowed the U.S. companies to return to the Libyan venture they had left in 1986, when the U.S. accused Muammar Qaddafi of supporting terrorism and President Ronald Reagan ordered the bombing of sites in Tripoli and Benghazi. National Oil holds the remaining 59.17 percent.
Output Projection
Waha, which develops fields in the Sirte basin, is pumping about 350,000 barrels a day, down from 1 million barrels a day in 1969 and 400,000 barrels a day in 1986, according to the U.S. Energy Department’s fact sheet on Libya. The venture’s partners plan to increase its output by 200,000 barrels a day, it said.
Wintershall’s parent company BASF SE, which has operated in Libya since 1958, is in talks with National Oil over revising contracts for its concessions as well as exploration and production sharing agreements, Wintershall spokeswoman Verena Sattel said today by telephone.
“We aim for an amiable solution,” Sattel said from the company’s headquarters in Kassel, Germany. She declined to comment on what stage talks are at or on how much oil Wintershall pumps in Libya.
The BASF unit has one offshore and eight onshore oil fields in Libya, all of which will be affected by the talks, according to Sattel. The company has invested $1.3 billion on wells in the country and will spend “hundreds of millions” more, she said in an e-mailed statement, without specifying a timeline.
Asset Nationalization
Qaddafi on Jan. 21 said crude prices need to rebound to $100 a barrel to temper calls for the seizure of foreign oil assets, according to state-run news service Jana. Libya, which holds Africa’s largest oil reserves, isn’t considering nationalizing the assets of foreign oil companies that operate under production-sharing agreements, Ghanem said Jan. 22.
Libya and the other members of the Organization of Petroleum Exporting Countries are cutting oil output to reverse a slump in prices caused by the global recession.
Crude futures have lost 72 percent since reaching a July record of $147.27 a barrel. Oil for April delivery traded for $40.80 a barrel in New York as of 10:06 a.m. local time.
Libya produced 1.630 million barrels of oil a day in January, down from 1.660 million barrels a day in December, according to Bloomberg estimates. It should be producing at a rate of 1.469 million barrels a day under a December accord to cut OPEC’s collective output.
To contact the reporters on this story: Maher Chmaytelli in Nicosia, Cyprus, at mchmaytelli@bloomberg.net; Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
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