In addition to producing the flagship fortnightly African Energy, AE’s team of experienced analysts also produce briefings and reports on a range of topics and issues that affect the region. Our expertise can be tapped by anyone and delivered in a range of formats. For more information contact Nick Carn. nick@africa-energy.com
Atlas 2010
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AfricaHardball is an executive dialogue that brings together policy-makers, industry leaders and analysts to discuss the key political issues affecting the African energy industry in frank and open terms.
The next AfricaHardball roundtable wil be held on 29 June, prior to the start of EnergyNet Ltd’s annual Africa Energy Forum (AEF), in Basle. Read more
Libya's Energy Future
Based on African Energy’s unparalleled track record in following Libya’s energy story and careful, originally sourced reporting from Libya and global markets, this special report analyses the major issues and the financial and political trends influencing development of Libya's energy industries. Read more
AfricaConnect seeks to stimulate the development of Africa's energy and electricity sectors as indispensable drivers of growth and self-sufficiency, through international campaigns to publicise Africa's critical power and energy shortages.
The nomination of 2010 as "The Year of Electrifying Africa" (YEA), will be a major feature of the campaign. Read more
Based on African Energy’s unparalleled track record in following Libya’s energy story and careful, originally sourced reporting from Libya and global markets, this special report analyses the major issues and the financial and political trends influencing development of Libya's energy industries.
Alongside the main report The Libya Oil & Gas Handbook profiles the major players and identifies the key contacts of companies operating throughout the hydrocarbons industry and can be used in conjunction with the maps and project listings in Libya’s Energy Future to create an indispensable guide to the Libyan hydrocarbons sector.
Libya’s Energy Future offers not only detailed insight into specific projects and players, but also a clear understanding and analysis of the dominant issues, making it essential reading for anyone serious about doing business in Libya
Al-Megrahi’s return protects vital interests - read the full text of this artice from the 4 September issue of African Energy (issue 169) plus archived articles from February 2008 and November 2007 showing African Energy's coverage of the politics surrounding BP's Libya deal, other British business and the fate of Megrahi.
Libya country archive – An extensive listing of articles and resources on Libya from the African Energy archive
• Analysis of Libyan government energy policy, focusing on attitudes to international companies and their contracts.
• Up-to-date reporting on exploration and development being carried out by every international company and joint venture, the challenges facing the oil and gas service sector and a forward-looking analysis of Libya’s gas potential.
• A comprehensive review of downstream investments ranging from pipeline projects through to the construction and upgrade of refineries and petrochemical installations.
• A full run-down of Gecol’s power generation, transmission and distribution projects, including analysis of the challenges facing the electricity sector.
Other features:
• Detailed listings of power projects, upstream exploration and development projects and downstream projects.
• Maps showing general infrastructure, pipelines, downstream facilities, power connections and generation plus detailed maps of the Libyan upstream basins showing exploration areas and fields.
The accompanying Libya Oil & Gas Handbook has been extensively researched to provide an essential reference tool for anyone serious about doing business in this competitive environment.
Published alongside Libya’s Energy Future, the handbook has been conceived as much more than a directory of company names and contact details. Profiling the major players and identifying their key contacts, the handbook also lists companies’ local oil block interests and can be used in conjunction with the maps and project listings in Libya’s Energy Future to create an indispensable guide to the Libyan hydrocarbons sector.
The handbook includes company profiles, addresses, principle contacts, telephone numbers and email addresses for National Oil Company (NOC) and its subsidiaries, international oil companies operating in Libya; NOC/IOC joint ventures; engineering and construction companies; seismic and geophysical services companies; and drilling, drilling services and work over companies.
Published as a PDF and printed file, the handbook is available to African Energy subscribers for £95.
The main report is available to subscribers as part of an African Energy subscription.
Subscribers may purchase the accompanying Libya Oil & Gas Handbook for £55.
Excerpts from Libya’s Energy Future
Placing a spotlight on opportunities, pitfalls of doing business in Libya
This special African Energy report dedicated to Libya is published one month ahead of the 40th anniversary of Colonel Muammar Qadhafi’s ‘Great El Fatah Revolution’. Edited by John Hamilton, it takes stock of the Libyan electricity, gas and oil industries. It examines the Great Socialist People’s Libyan Arab Jamahiriya’s governance and financial record, and assesses the potential for international partners to do business in the Jamahiriya (State of the Masses).
The report examines Libya’s projects roster – there are three African Energy ‘update’ tables listing power, upstream and downstream oil and gas schemes, in addition to analysis of development in each of these sectors. Impressive lists of ongoing and planned projects reflect this OPEC member’s potential spending power and the interest now shown in Libyan business by international oil companies (IOCs) and banks. This follows Libya’s political rehabilitation earlier this decade, following years of sanctions triggered by the implication of Qadhafi’s then maverick Jamahiriya in a number of high-profile terrorist episodes.
History may show that Qadhafi’s willingness to renounce weapons of mass destruction and share intelligence with the United States and other former enemies after the 11 September 2001 attacks (by radical jihadists who had also emerged as his regime’s sworn enemies) was the most adroit piece of geopolitical manoeuvring by an Arab leader in the past decade. One effect was to undo the sanctions that had kept US companies out of Libya – allowing the ‘Oasis Group’ and Occidental Petroleum Corporation to return, and even bigger players, including ExxonMobil, BP and Royal Dutch Shell to come in.
Libyans have always been good at business, as is apparent in everything from the buzz in Tripoli’s souks to the deals cut by middlemen on the shores of Lake Geneva. But the political opening which took place earlier this decade – and the emergence of a new generation of leaders, led by the most reform-minded of Qadhafi’s powerful family, Mohammed Sayef Al-Islam El Qadhafi – created an environment in which a more laissez-faire, and vibrant formal economy might eventually emerge. The prospects for private investment in power generation and petrochemicals are discussed in several articles. Despite General Electricity Company of Libya’s problems – and perhaps because of them – a first independent power project might emerge. Norwegian fertiliser giant Yara International’s joint venture with National Oil Corporation and Libyan Investment Authority to upgrade the Marsa Al-Brega urea and ammonia plant is the sort of project that could create a dynamic new industrial base.
But such developments depend on getting the politics right. African Energy’s canvassing of a range of markets found trade and project financiers either disappointed at the levels of business achieved or still to be persuaded that post-sanctions Libya really is a good risk. At the centre of so many developments is Qadhafi himself, ebullient in his current role as African Union president even after four decades in power, along with his family and closest allies. For now, no appreciation of doing energy business in Libya can afford to ignore personalised political factors, but neither is the challenge so daunting that several of the major projects described above won’t happen.
Alongside this report, African Energy is producing a handbook profiling major industry participants and listing key contacts, with the aim of encouraging Libya’s business opening.
John Hamilton led this project, helped by a wide range of contacts in Libya and beyond. He was supported by the Cross-border Information team. Jon Marks and Kevin Godier wrote articles in Finance and policy. Thalia Griffiths, Shirley Giles, Eleanor Gillespie, Dagmara Ginter, Jill Macfarlane-Miller and David Slater provided editorial support, while African Energy’s peerless cartographer David Burles produced the maps and graphics.
Contract renegotiations, volatile policy-making test Tripoli and its partners to the limit
The great opportunities that tempted so many international players into Libya’s energy sector have not gone away. But IOCs who entered the Jamahiriya on ground-breaking EPSA-4 terms will this year relinquish assets for the first time since Libya reopened to the global economy. This will test to the limit Tripoli’s belief that it can renegotiate ever tougher terms with its partners, writes John Hamilton, who edited this African Energy special report
The NOC conundrum for IOCs
Libyans have always enjoyed an enviable reputation of being ruthless negotiators. “They could open a university of negotiation,” a hardened British deal-broker recently quipped to an African Energy journalist. But IOCs’ current grumbles about revisions to their terms doesn’t mean that National Oil Corporation has decided it can do without them. On the contrary, NOC says it wants to bring in partners for long-term oil field redevelopment and for other investments throughout the value chain. One senior executive who visited London last December said NOC was “looking for long-term relationships that will last for generations to come.” It was not just a matter of coming in, carrying out a small project and leaving. He pointed out that 70% of Libya’s oil still remained in the ground. “We need new efforts and technology to get it out. Even without new technology there is lots of scope for EOR and IOR [enhanced and improved oil recovery] in years to come.”
Power
Gecol toys with IPP plan to solve finance problems
Gecol’s leadership problems are exacerbating the state utility’s already serious financial and management problems. But despite a lack of organisation at the top levels of the company, speculation is mounting that Gecol could usher in the Jamahiriya’s first independent power project as it seeks to mobilise financing for Libya’s ambitious generation plans.
Slow start for wind and solar
Libya has been slow to start developing renewable energy projects. Unlike neighbouring Algeria, where a large solar project is under discussion and an experimental hybrid gas/solar plant is already under construction, Libya has no major projects in the pipeline.
NUCLEAR: Former pariah gets international support
After years of political isolation, Libya has emerged from isolation by signing agreements with France, Russia, Ukraine and Canada to develop a civil nuclear energy programme. The Canadian MoU to co-operate on nuclear energy was signed in Tripoli on 29 July. It covers co-operation in nuclear research and in the mining, processing and transport of uranium, as well as its use in medicine and desalination projects.
Upstream oil and gas
Companies spend millions on exploration but NOC’s production targets may fall further
The government has been forced to abandon ambitious targets as output grows more slowly than anticipated, while bureaucratic delays and shifting contract terms have put NOC under pressure, writes John Hamilton
Libya’s oil production will increase at a much slower pace over the next few years than the authorities have previously claimed. This fact was officially recognised earlier this year when the General People’s Committee (the cabinet) formally abandoned the objective of increasing output from the current 1.7m b/d to 3m b/d by 2013. In May, it said that a revised 2009-13 oil sector development plan would increase production to around 2.3m b/d (AE 164/17).
INTERNATIONAL OIL COMPANIES: Huge investment pledges from hard negotiations
National Oil Corporation (NOC)’s renegotiations of long-term production contracts over the past 18 months have been painful for its partners. Five international operating companies (IOCs) led by Italy’s Eni SpA accepted the halving of their production shares in return for licence extensions of up to 30 years. Agreed during the period of extremely high oil prices, the new contracts commit the companies to massive investments over the next five to seven years, but with a sharply reduced upside.
First EPSA-4s in final phase
The optimistic days of untrammelled competition, when companies were happy to accept minimal production shares in return for a stake in the Jamahiriya’s hydrocarbons future now seem far away. In the coming year, the future of more than 20 IOCs which entered Libya in the first two EPSA-4 licensing rounds in 2005 will be decided. A few will develop fields, but many will have to choose between relinquishing exploration blocks or negotiating extensions with National Oil Corporation.
Verenex remains mired in messy Libyan ‘squeeze play’ saga
Libyans in general and National Oil Corporation in particular have acquired a reputation as ruthless negotiators. But NOC’s ‘gloves-off’ approach to its dealings with Verenex Energy, the Calgary-based independent which is looking to cash in on its substantial exploration success, has dismayed industry observers.
EPSA-3 companies look forward to development
The most successful IOCs exploring in Libya are those who agreed licences in 2003 at the end of the three-year EPSA-3 licensing process. More than 120 blocks were offered to companies at the Zawia investment conference in 2000, of which a relatively small number were contracted after lengthy negotiations.
Huge exploration commitments are Libya’s best chance
Three of the biggest exploration programmes planned in Libya over the next period are now under way. Massive investments from Royal Dutch Shell, BP plc and ExxonMobil offer the Jamahiriya its best chance of discovering and developing large-scale oil or gas fields in the medium term.
Downstream hydrocarbons
Tripoli looks to partners for refineries’ expansion
Like many African countries, Libya has its share of refining projects that have never been built, but the authorities’ new enthusiasm for joint ventures has seen the pace pick up. Now’s the time to see how long investors’ pockets really are
Libya has turned to foreign partnerships to help it develop its downstream sector, and is showing strong appetite for joint ventures after a period in which several projects fell apart over failure to agree terms. Now, at last, there are signs that long-awaited projects are getting off the ground to add value to National Oil Corporation (NOC)’s crude and target markets in North Africa, Europe and further afield.
PETROCHEMICALS: Norwegians show benefits of tapping foreign funds and skills
National Oil Corporation’s policy of opening its downstream to private investors is bearing fruit in the petrochemicals sector, where Norwegian fertiliser giant Yara International in February confirmed a joint venture with NOC and Libyan Investment Authority (LIA) to upgrade the Marsa Al-Brega urea and ammonia plant.
OIL TRADING: Crude allocations remain complex in contracting market
In spite of a sharp reversal in the oil market over the past nine months, the strategies for buying and selling Libyan crude oil have changed little. Companies still face a complex process: first to secure an allocation and then to negotiate the appropriate discount, if it is available. There are precise rules governing what categories of buyers are permitted to make such deals and traders told African Energy that, in practice, additional approval is probably also necessary from the highest level of government and national leadership.
Eni plans to increase gas sales
Eni SpA continues to invest heavily in Libya. The Italian major plans to increase gas production from the onshore Wafa and offshore Bahr Es-salam fields by 3bn m3/yr to reach about 13bn m3/yr by 2014. The fields are part of the Western Libyan Gas Project (WLGP) in which Eni has a 50% stake.
Finance and policy
Fortieth anniversary celebrations to mark a regime entrenched
The 40th anniversary of Muammar Qadhafi’s Fatah Revolution will confirm the regime’s hold on power and ability to shape Libya’s direction. Changes are anticipated to the way the political system operates, but more important still may be shifts in the pecking order within the first family, writes Jon Marks
A central role for the Qadhafi children
Still the elemental force in Libyan politics, Colonel Muammar El Qadhafi has been married twice. His second marriage, to Safiya Farkash Al-Barassi, has produced several children, with the eldest, Mohammed Sayef Al-Islam El Qadhafi, positioning himself as a beacon of reform favoured by local liberals and western governments to take over from his father.
Localisation adds to burden on companies
NOC’s push to get international operators to do work and employ locally makes political sense to Tripoli, but localisation measures are adding to the pressure on foreign partners
Investment funds look for partners as they push into Africa
Tripoli’s several Africa-focused investment funds have announced dozens of energy sector and other deals in the past year. Now they are looking for western partners to create the joint ventures that might turn many of these deals into genuine projects
Short-term emphasis dominates trade and project financing trends
Through adroit political manoeuvres, Colonel Qadhafi has steered his country back into the global mainstream; rising income from hydrocarbons has swelled the coffers of Libyan investment funds and enhanced their ability to make deals across Africa and beyond. But despite such positive indicators – discussed in articles below – the terms offered by the trade and project finance market remain tight, and demand for cover from Libya is thin, according to the financiers who talked to Kevin Godier
Libya’s Energy Future offers not only detailed insight into specific projects and players, but also a clear understanding and analysis of the dominant issues, making it essential reading for anyone serious about doing business in Libya
Order Libya’s Energy Future and accompanying handbook now:
Sample articles on Libya from the African Energy archives
Al-Megrahi’s return protects vital interests
Nearly a decade of quiet British diplomacy and adroit Libyan manoeuvring left Scottish Justice Minister Kenny MacAskill with no realistic option but to return convicted Lockerbie bomber Abdelbasset Ali Mohammed Al-Megrahi to Libya. Any alternative would have thrown into question the whole logic of rapprochement with Libya – one of the UK’s few notable international triumphs of recent years. Issue 169, 4 September 2009.Read the full article
How BP’s Libya deal got back on track
The ratification of BP’s $900m gas exploration contract with National Oil Corporation (NOC) returns British relations with Libya to an even keel. As African Energy exclusively reported in November, Libyan Leader Muammar Qadhafi halted the deal to pressure the UK into allowing Lockerbie bomber Abdelbaset Ali Mohammed Al-Megrahi to be repatriated (AE 126/1). Issue 132, 8 February 2008.Read the full article
Libya: big opportunities, tough market – then there’s the politics
Concern that BP’s mega gas exploration and development deal may be delayed by the apparently never ending Lockerbie affair adds to the view that success in the Libyan hydrocarbons sector is hard to achieve, even for the biggest, best-supported operations in the business, writes John Hamilton. Issue 126, 16 November 2007.Read the full article
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