Brazil’s Petrobras Wins Tender for Lybian Oil

Brazilian oil giant Petrobras was one of the winners of the international tender for exploration of 15 oil and gas areas in Libya. The result of the tender was announced on January 29 by the government of the Arab country and confirmed yesterday by a spokesperson for the Brazilian state-owned company.

According to information supplied by Jamahiriya News Agency (Jana), Libya’s Official News Provider, this was the first tender of the kind in the country. Libya was one of the Arab countries visited by Brazilian president Luiz Inácio Lula da Silva in December 2003.


Petrobras did not inform, however, details of the deal, among them the value, duration and area to be explored.


However, according to information supplied by Algerian News agency Algérie Presse Service (APS), seven international companies, among them Petrobras, US companies Amerada Hess and Chevron Texaco and other companies from India, the United Arab Emirates and Australia will have the right to prospect 14 blocks in the regions of Syrte, Merzek, Berka and at sea.


According to Jana, during the tender, 56 companies from 28 countries made 104 bids for exploration.


The winners are going to prospect 2,820 square kilometers of territory using a method of three-dimensional seismic studies; another 24,000 square kilometers with two-dimensional studies, and are going to drill 24 wells for exploration.


Seismic studies are a kind of “tomography” of the ground, used to identify its composition without the need for drilling. The three-dimensional studies are a more advanced process than the two-dimensional ones.


In all, according to Jana, companies are going to invest US$ 198 million and will have the right to loans totalling US$ 115 million. According to Petrobras, oil, gas, both or neither may be found. In 1974, for example, the Brazilian company prospected oil in Libya, but did not find a commercially viable exploration area.


Victory in this tender marks the return of Petrobras to the Arab world 25 years after having left Iraq, when the country government nationalized oil reserves.


Still in the Middle East, but outside the Arab world, the company is also gong to prospect oil in Iran. Before interrupting their work in the region in 1980, the company also operated in Egypt and Yemen.


Another company included in the list of winners of the tender is Algerian state-owned company Sonatrach. According to APS, the company is going to explore block number 67, situated in Ghadamès basin.


Abroad, Sonatrach is already present in exploration of a gas basin in Peru and, added APS, has 10% participation in the Camisea deposit.


Eighth Largest Reserves


Libya is located in the North of Africa and is bathed by the Mediterranean. The country is in one of the members of the Organization of the Petroleum Exporting Countries (Opec) and, according to information supplied by the organization, has proven reserves of 39 billion barrels of oil, putting the country in the third position among the largest world oil reserves and in first on the African continent.


Average Libyan production in 2003, according to the Opec, was 1.4 million barrels per day, a figure that is currently, according to information on the BBC web page, at 1.6 million barrels a day.


The local government, according to the BBC, intends to increase daily production to around 2.1 million barrels by the end of the decade.


Although Libya has the fourth largest reserves in the world, the country is only in the 16th place among the producers, even losing to Brazil.


It is necessary to recall, however, that the country lived under an international economic embargo since the end of the 1980’s, when the Libyan government was accused of being responsible for a terrorist attack that blew up a Boeing 747 belonging to former airline PanAm while it was flying over the city of Lockerbie, in Scotland, in 1988.


In 2003, Libyan leader Muammar Gaddafi announced that he was going to indemnify the families of victims of the attack and, in the same year, stated that he would start disarming his country with the elimination of weapons of mass destruction. Soon after that, sanctions against his country started being cancelled.


With a population of 5.6 million inhabitants, Libya has a Gross Domestic Product (GDP) of US$ 17.7 billion. The main industries in the country, apart from oil, are those of cement and textile products.


Trade Balance


The trade balance between Brazil and Libya is among those that grew most in the Brazilian trade balance. Last year, Brazilian exports to the Arab country totalled US$ 116.3 million, presenting a 121% increase when compared to 2003. The main products shipped were iron, cattle beef, sugar, glass insulators for electric systems and butene.


Brazilian imports from Libya, in turn, totalled US$ 56.7 million, with growth of 117,5% in comparison to 2003. The two products imported by Brazil were naphtha for use in the petrochemical industry and methanol.


ANBA ”“ Brazil-Arab News Agency

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