Saturday, Sep 19, 2009
(This item was originally published Thursday.)
By Tahani Karrar
Of DOW JONES NEWSWIRES
DUBAI(Zawya Dow Jones)-- European-Libyan consortium Akakus Oil Operations won't raise its Libyan oil production capacity to an average 400,000 barrels of oil equivalent per day for 2010 as initially planned, a senior Libyan oil official told Zawya Dow Jones.
Instead it will likely continue pumping about 100,000 barrels less a day as long as the country's OPEC quota remains at current levels or decreases, according to other officials familiar with the matter.
Spain's Repsol YPF SA (REP.MC), the operator and, with a 20% stake, the largest international oil company shareholder in the Akakus consortium, has trimmed its Libyan oil production in keeping with Libya's reduced OPEC oil production quota, the company said.
The Organization of Petroleum Exporting Countries, of which Libya is a member, agreed late last year to slash its oil production target by 4.2 million barrels a day. The move succeeded in removing many unwanted barrels of oil from the market and helped to reverse a steep slide in oil prices.
As Libya implemented the cut to its OPEC production target, Repsol had to pace its Libyan investments, and Akakus reduced its output, Repsol said. Akakus is currently producing less than 300,000 barrels of oil equivalent, or boe, a day - a fall from its peak of 320,000 boe a day last year, Kristian Rix, a spokesperson for Repsol in Madrid, said Thursday.
"With the credit crunch, the plan is prudence, prudence, prudence," said Rix. "It makes no sense for us to raise capacity now if we are not going to use it."
Libya's National Oil Co. (NOI.YY) said in April that the Akakus consortium would boost its production capacity in line with plans to raise the country's capacity to 2.3 million barrels per day by 2013. But Libya now expects the Akakus oil-capacity expansion goal won't be met.
"Repsol is in the engineering phase now; I don't see much of that capacity realized in 2010," Libya's OPEC Governor Ahmed Elghaber said in a telephone interview this week.
However, Rix said Akakus will accelerate investments in raising capacity if Libya's quota increases in the future.
In 2008, NOC announced Repsol had extended to 2032 its contracts to operate and explore for oil in blocks NC115 and NC186 of Libya's onshore Murzuq basin, some 700 kilometers south of Tripoli. The extension, agreed with NOC, implied a gross investment in excess of $2 billion to reach a current plateau production level of 380,000 barrels of oil per day.
Repsol has had a presence in Libya since the 1970s. At the end of 2008, the company said its total production from its two blocks in El-Sharara field and Murzuq basin in Libya amounted to an average 302,000 barrels of oil per day for 2008.
In April this year, the company announced it made two further oil discoveries at block 200 at Murzuq Basin - about 1000 kilometers south of Tripoli.
NOC has a 50% stake in Akakus while other members, France's Total SA (TOT) and Austria's OMV AG(OMV.VI), hold 15% each.
-By Tahani Karrar, Dow Jones Newswires, +9714 364 4965 Tahani.Karrar@dowjones.com
Copyright (c) 2009 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
19-09-09 0628GMT
