Who will get Libyan oil?

Developments of recent months and recent days especially brought to light questions on presence of Russian companies in this North-African country. So what will be next? It is understandable that the administration has changed. Who will be after Gaddafi? Have representatives of new Libyan authorities any preferences in the sphere of cooperation with Russian companies? Today we will discuss it.

Alexei Sukhov, the head of the department of international cooperation under the Ministry of fuel and energy of Russia:

Why is our ministry interested in Libya? First of all, we realize that Libya despite developments, which have taken and are taking place in it, is still a country of a huge territory. According to square, it takes the fourth place in Africa, that is why it makes other regional and world countries to pay attention to it. Explored resources of oil and gas in this country show that interest to development of cooperation with this country is very important for the Russian ministry of energy. Moreover, we had positive experience of cooperation with Libyan partners before aggravation of the military political situation in this country. I think you know that before February 2011 several Russian companies have had contracts with Libyan partners. First of all, I would like to draw you attention to suspended contracts with Gazprom, GazpromNeft and Tatneft, as well as LUKoil, which has always had very active position concerning Libya. Last year these companies actively presented themselves at the Libyan market. Maybe you will be interested in such data: Gazprom explored two deposits on one of shelves of the Mediterranean Sea and ashore. GazpromNeft actively cooperated with the Italian concern Eni on development of energy cooperation in trilateral format. Before February Tatneft had contacts with 18 Libyan energy companies and were exploring four deposits. Unfortunately, for well-known reasons aggravation of military political situation in the region and in the country led to suspension of the cooperation. However, we can see that the current Libyan administration, I mean The National Transitional Council of Libya, give us signs on renewal of cooperation with Russia. One of important directions of this cooperation will be trade and economy ties, and they will be based on energy cooperation between Russia and Libya. The ministry of energy represents Russia in the cooperation and hopes for future interrelations and its extension in various directions.

Azad Babayev, the oil industry expert:

At the moment the theme of oil contracts with Libya is the most relevant in the world arena. Everybody wants to know, who will get oil contracts of Libya. As my colleagues have already said, several our companies, LUKoil, GazpromNeft, Tatneft and Gazprom, participated in development of oil in Libya and had to stop it and leave the country because of the well-known events. Among international companies, which explored gas and oil in Libya, were Chinese companies. Investment of Chinese companies is much bigger than Russia’s. According to appraisals, our companies invested on the average $1 billion, while Chinese companies invested several billion dollars. If we compare Libya and Iraq, we can remember that the Iraqi war had started due the similar reasons as in Libya, i.e. fight for oil. Today Libyan resources are appraised up to 30 billion barrels oil. Moreover, it has significant resources of natural gas, which makes it more attractive for oil and gas producing companies. Probably, the contracts will be signed with the countries, which supported Libyan opposition: French Total Elf, Italian Eni, English British Petroleum, and American Exxon Mobil. Major part will be divided by these four countries. We hope that our company will participate too. The government does its best in this sphere. I think that our companies and governmental officials should look at the Chinese colleagues, who had to leave Iraq in 2003 and now has to leave Libya, as well as our companies, wastage of LUKoil only was more than 7 billion rubles, and LUKoil managed to come back to the Iraqi market only 7 years after. I think we should follow an example of China and have wait-and-see attitude, as nobody knows how the Libyan war will end. There are more than 130 tribes in Libya. Today they have a common enemy, Gaddafi. Gaddafi managed to maintain balance between tribes, and now each of the tribes will want to take more power. That is why a new struggle for Libyan oil can be started. Unlike Libya, NATO takes part in developments in Iraq. NATO forces will not participate in Libya. That is why I suggest to wait and see foe a while, and time will tell. We should be patient. Anywhere our companies will come back to the Libyan market, and new companies will be newcomers to the country, like Rosneft, Bashneft and others.

VK