BP mothballs Libyan onshore project due to security concerns
11 March 2014
The latest annual report from UK-based oil major BP has confirmed the group has mothballed development of the Ghadames basin, near Libya’s border with Algeria and Tunisia. The group says this is due to security concerns, making it the latest in a series of companies to rethink their projects in the country because of ongoing political instability.
"With respect to the onshore exploration drilling programme, a security review in June concluded that this could not be safely and securely delivered by BP at this time. Alternative approaches are being considered," BP said in its annual report.
BP's 2007 exploration and production sharing agreement with Libya covers development of the onshore Ghadames basin and the offshore central Sirte basin, which will go ahead as planned as the safety risks offshore are much lower.
BP is still at the exploration stage and currently does not produce oil in Libya. Its assets there were worth $472 million at the end of 2013, according to its annual report.
Since Gaddafi's overthrow in 2011, instability in Libya has been rising, with attacks on foreigners becoming increasingly frequent. A mix of disgruntled workers, separatists and militias have blocked much of its oil exports for months at a time.
In the latest manifestation of the country’s instability, on March 10 the Libyan Government said it had stopped a North Korean-flagged tanker that had loaded oil from a rebel-held port, after naval forces briefly exchanged fire with the rebels.
This was, however, denied by rebel leader Ibrahim Jathran, who said his forces were still in control of the tanker.
LIbyan officials also said the government will assemble forces to "liberate" all occupied ports, raising the stakes over a blockage that has cut off vital oil revenue, but it is unclear if they have the military might and political will to re-establish control over areas outside Government control in the East of the country.
Rebels, who have seized three ports and partly control a fourth in the North African country, said they had dispatched forces to central Libya to deal with any government attack.
In September, Exxon Mobil said it would cut its staff and operations in Libya due to growing insecurity. Royal Dutch Shell abandoned exploration on two blocks in 2012 after disappointing results and last year Marathon Oil attempted to sell its stake in one of Libya's top oil ventures, but Libya blocked the deal.
Contact Details and Archive...