As Libya’s political and military situation returned to the relative normal, the country is now seeing a renewal of business activities, also in its oil and gas sector.
So also Russian companies resumed production; they secured many licenses in the country back at the time when Gaddafi was in power.
Gazprom EP International has resumed crude oil production in Libya under its joint venture agreement with Germany’s Wintershall Dea.
This took place last fall though the company’s officials have informed about this only now.
Oil production facilities reopened after a ten-month hiatus amid a fragile political and military situation in Libya that indeed shook the country’s oil exports.
It was only last fall when the civil war saw some stability and works resumed at Libya’s port facilities, terminals, and then also mining facilities.
Gazprom informed that the Russian and German businesses transferred the duties of the field development operator in Blocks 91 and 107 in the Sirte Basin to the joint venture they had established with the Libyan National Petroleum Company (NOC).
The company’s name is Sarir Oil Operations B.V. As part of it, Gazprom aims to increase production from 43,000 barrels per day to 62,000 barrels per day this year.
Gazprom EP International holds 49 percent in the joint venture with Wintershall Dea, Wintershall Aktiengesellschaft (WIAG). The latter company is a development operator in Blocks 91 and 107 in Libya.
Nine oil fields were also discovered in the area; they are now being exploited. The As-Sarah field located within contract Block 91 is the largest of them. Gazprom is not the only Russian business present in Libya. There is also Tatneft that seeks to continue the oil projects it was forced to halt due to the civil war.
It was present in Libya under a 2005 concession deal until 2014 when the country plunged into wartime turmoil. In 2019, the company said it had conducted a feasibility study for the development of new deposits in the Ghadames Basin.
Another Russian Oil Giant Resumes Operations In Libya
Russian oil producer Tatneft is ready to resume oil production in Libya and the company’s specialists are already working on this matter locally.
Furthermore, not only does the giant wish to restart work abandoned as hostilities broke out in the country, but it is also looking for new opportunities for exploration.
The Libyan government is encouraging Russian companies to come back to the country, seeking to rebuild economic ties both states had enjoyed in the Gaddafi era.
“As soon as it will be possible, we are already working in Libya on production restart,” the CEO of Tatneft Nail Maganov told journalists. “Our specialists are already working there,” he added.
In March, Tatneft announced its plans to seal Libyan energy projects hampered by political tensions and violence in the North African country. Maganov said then the company intended to complete work it had been forced to cease after a revolution swept across the country.
The chairman of the board of Tatneft and president of Tatarstan, Rustam Minnikhanov, expected that the total production from the projects in Libya and Syria would reach 50 million tons.
These are preliminary estimates that will be updated as exploration work is conducted. Tatneft worked in Libya under the concessionary agreement from 2005 right until 2014, when hostilities erupted in the country.
In his meeting with journalists on the sidelines of the Russian Energy Week forum in fall 2019, Maganov said his company was looking for new blocks in Libya.
As it later turned out, the contracts between the two sides include four exploration and production sharing agreements in Ghadames and northwestern Libya off its borders with Tunisia and Algeria.
In January 2020, the company’s senior geologist and deputy chief, Rais Khisamov, told journalists that Tatneft had employed local companies to carry out research work as none of its specialists had been present in Libya.
After a truce was negotiated in the country, the Tripoli authorities have made no secret of the fact that they would like to see Russian businesses return to Libya, notably Gazprom, Rosneft, and Tatneft. In May, Gazprom EP International has resumed crude oil production in Libya under its joint venture agreement with Germany’s Wintershall Dea.
Gazprom has been on the Libyan territory since 1966. When in Moscow in February 2021, Libya’s Deputy Prime Minister Ahmed Maiteeq said Russia and Libya could renew by the end of this year an intergovernmental agreement on trade, economic, and financial cooperation the two countries had concluded in 2008 under Muammar Gaddafi.
The deal was worth between $8 billion and $10 billion and some investment projects have already been completed.
Libya’s deputy prime minister estimated the remaining business projects at some $4 billion. The Tripoli-based government would like to achieve this by renewing economic ties with Russia.