Occidental Petroleum Wins Major Oil Deal in Libya

Occidental Petroleum wins major oil deal in Libya

LOS ANGELES, Nov. 26 (Xinhua) — U.S. oil giant Occidental Petroleum announced Monday that it has won a major development deal to upgrade some of its existing petroleum contracts in Libya,including plans to increase production over the next five years.

The Los Angeles-based company said about 5 billion dollars in capital investment is expected to be made to increase gross production to more than 300,000 barrels per day from the current level of around 100,000 barrels per day.

The new contract provides for a 1 billion-dollar signature bonus payable over three years reflecting the company’s participation for the next 30 years in fields containing substantial proven reserves, with about 2.5 billion barrels of recoverable high-quality oil reserves.

Ray Irani, CEO of Occidental, said in a statement that Libya isa core country for his company’s oil production and the company would like to add additional growth projects there.

Occidental began operations in Libya in 1965 and continued operating until the United States imposed sanctions against the country in 1986. It became the first U.S. company to resume oil operations in Libya after the U.S. sanctions were lifted in 2004.

Industry analysts said the deal marks a win-win for the oil firm and Libya due to the record high and ever-increasing oil prices, although Occidental will get a lower share of 10 to 12 percent of production, instead of a traditional 20 percent, under the new terms.

The deal marks the second pact with Libya recently by an American oil company after an Exxon deal last week and it comes out as the oil price approaches the 100-dollar mark.

(c) 2007 Xinhua News Agency – CEIS. Provided by ProQuest Information and Learning. All rights Reserved.