1.(SBU) Summary: Libya's National Oil Corporation (NOC) has signed extensions for a pair of exploration and production sharing agreements (EPSAs) with Spain's Repsol, France's Total, Austria's OMV, and Norway's Saga Petroleum, continuing its policy of redefining old contracts under the new EPSA IV framework. The joint investment commitment in the new deal should help boost Libyan production significantly in the years to come. End Summary.
2.(SBU) In a widely-anticipated move, a consortium of European oil companies has extended its contracts in Libya. A new EPSA agreement signed on July 17 with a four-company consortium operated by Spain's Repsol covers two blocks, NC115 and NC186, in the Marzuq Basin, and extends the duration of the contracts to 2032. This represents an additional 15 years for NC-115, and from five to nine years (depending on the specific fields) in block NC-186. The deal ensures the exploitation of the vast resources discovered in both blocks, whose remaining proven oil reserves at the end of 2007 totaled 765 million barrels.
3.(SBU) Within the new framework, the production share for the European consortium will be reduced from 25% to 13% for NC-115 and from 40% to 12% for NC-186. Under the former agreement, the production share was 75% for the NOC, 10% for Repsol, 7.5% for OMV, and 7.5% for Total in Block NC-115; and 60% for the NOC, 12.8% for Repsol, 9.6% for OMV, 9.6% for Total, and 8% for Saga. The new agreement represents 87% for NOC, 5.2% for Repsol, 3.9% for OMV, and 3.9% for Total for block NC-115. In block NC-186 the new percentages run 88% for the NOC, 3.84% for Repsol, 2.88% for OMV, 2.88% for Total and 2.4% for Saga. The new contract also includes a $1 billion signature bonus payable by the consortium over three years, and a gross investment requirement in excess of $4 billion, of which 50% will be covered by the NOC, in an effort to reach a steady-state production level of 380,000 barrels of oil per day.