Italy’s Eni signed a preliminary agreement with BP and Libya’s National Oil Corporation to acquire a 42.5 per cent stake in BP’s Exploration and Production Sharing Agreement in Libya.
Eni is looking for a participating interest and operatorship, currently held by BP, in the contractual areas A and B (onshore) and C (offshore) in Libya, Eni said in a statement.
NOC Chairman, Mustafa Sanalla, BP group chief executive, Bob Dudley, and Eni CEO, Claudio Descalzi, signed a Letter of Intent (LOI) in London on Tuesday which will launch the process for Eni’s acquisition aimed at boosting Libya’s exploration and development activities.
BP holds an 85 per cent working interest of the second party share in each block, with the Libyan Investment Authority holding the remaining 15 per cent. The parties intend to finalise and execute all necessary agreements by current year-end, with plans to restart exploration activities in 2019.
“This is an important milestone that will help to unlock Libyan exploration potential by resuming EPSA operations that have remained suspended since 2014,” said Eni CEO Claudio Descalzi.
“It contributes towards creating an attractive investment environment in the country, aimed at restoring Libya’s production levels and reserve base by optimising the use of existing Libyan infrastructure,” he added.
The agreement also strengthens the parties’ commitment to contribute to social development in the country through the implementation of social impact initiatives, including specific education and technical training programs.
“This agreement is a clear signal and recognition by the market of the opportunities Libya has to offer and will only serve to strengthen our production outlook. The agreement’s social development guarantee is an important sign of our joint commitment to our staff and the communities in which we work. This initiative will hopefully drive further inward investment and facilitate higher production levels,” said NOC’s Sanalla.
BP’s Dudley said: “This is an important step towards returning to our work in Libya. We believe that working closely together with Eni and with Libya will allow us to bring forward restarting exploration in these promising areas.”
BP’s EPSA will benefit from significant synergies with Eni–NOC existing facilities and Mellitah Oil & Gas Co operational resources - applying Eni’s fast-track delivery model to accelerate production. This will further support NOC to meet its domestic energy supply needs and promote the development of Libyan capability through training and social investment.