In Libya, Gazprom International participated in three projects simultaneously:
1. Development of the offshore plot No. 19 under the condition of product sharing (commencement of drilling works had been planned for mid-2011).
2. Development of plot No. 64 in the oil-and-gas bearing Ghadames basin (the first well had needed to be drilled in January 2011).
However, due to the destabilization of the situation in this country, all works carried out at these plots were terminated, and all wells and key equipment deactivated.
3. Oil concessions C96 and C97 in partnership with Wintershall A.G. (subsidiary of German BASF chemical concern). The aggregate development for two concessions (within the framework of Gazprom’s 49 percent share) accounted for 2 million tons of oil and gas condensate and approx. 230 million m3 of gas in 2010.
Currently, extraction of hydrocarbons continues at the deposits within the concessions.
Plot No. 19
In March 2007, Gazprom and Libya’s National Oil Corporation (LNOC) signed an EPSA-IV production sharing agreement (the 4th type PSA) relating to the project for the development of the oil-and-gas bearing plot No. 19 of 10.3 thousand sq.km. In December 2008, 3D offshore seismic works were successfully performed at this licensed plot. In 2009, the obtained seismic data were processed. In the same year, the specialists of Gazprom Libya B.V. (a member of Gazprom International Group) performed additional works relating to the complex interpretation of available 2D seismic data (more than 20 thousand running km) and well data (35 wells). Based on this work, a geological and geotectonic model was developed for analyzing the nature and peculiarities of an oil system at plot No. 19, and a range of key facilities were selected as a result; three of them were recommended for test drilling.
Throughout 2010, active preparations were made to start drilling works by mid-2011; however, these were stopped when the civil war began.
Plot No. 64
In 2007, Gazprom Libya was recognized as a winner of the IV open gas tender for the right to survey and develop hydrocarbons at the onshore licensed plot No. 64 in the Ghadames basin (units 1, 2 and 3 of 4 thousand sq.km). In February 2008, a Product Sharing Agreement (PSA) was signed with the LNOC.
From the end of 2008 to mid-2009, the first on-site stage of seismic surveying was carried out at plot No. 64, and the obtained data was processed.
Apart from processing the data obtained in the course of the 3D seismic survey, works relating to the complex interpretation of older 2D data (approx. 24,000 running km) and well data were performed in the Libyan office of Gazprom Libya in order to create a regional geological database for the development of a geological and geotectonic model of a large part of the Ghadames basin (more than 80 thousand sq. km), and for analyzing the nature and peculiarities of the oil system at the plot.
In accordance with the obligations provided for by the PSA, the geological survey cycle at plot No. 64 included the drilling of 6 exploratory wells. The first one was drilled on January 31, 2011, but due to destabilization of the situation in the country, the drilling was terminated, and the well was temporarily abandoned.
On February 26, 2011 Gazprom Libya announced a force majeure that is still in force. The company notified thereof LNOC’s management and all contractors with whom contracts had been made by this time. After having announced the force majeure, measures were taken to protect the equipment and materials situated both at plot No. 64 and Gazprom Libya’s warehouse in the Misurata free zone. Urgent measures were taken to evacuate all personnel, which was done without any losses. Only Libyan citizens stayed to work at Gazprom Libya’s office in Tripoli; however, currently, the company is not engaged in any operating activities. As a result of military activities and marauding acts, the company has incurred financial losses, However, 90% of materials and equipment was saved, thanks to the measures taken in a timely manner.
Oil concessions C96 and C97
In December 2007, as a result of completion of the transaction relating to the exchange of assets with BASF, Gazprom obtained a 49 percent share in the Libyan oil concessions C96 and C97 owned by Wintershall A.G., one of the oldest oil concessions in Libya. They were signed as early as in 1966 for a period of 50 years and extended until 2026 in 1997. Extraction has been carried out here since 1970s.
The proven reserves under the Wintershall (as of January 2011 within the Gazprom’s 49 percent share) account for 113.4 million barrels of oil, 9.7 million barrels of condensate and 2.7 billion cub. m of gas.
On February 20, 2011, upon agreement with the local authorities, a decision was made to temporarily terminate extraction from all deposits; however, this was resumed in October 2011. Now, according to Wintershall, oil extraction under concessions account for approx. 100 thousand barrels per day.
Libya is a Mediterranean country in Northern Africa.
With territory of 1.76 million sq. m, Libya is the fourth largest country in Africa. 1.7 million of 6 million Libyans live in its capital, Tripoli. The country is divided into three large areas (provinces): Tripolitania (West), Cyrenaica (East) and Fezzan (South). The administration is divided into 22 municipalities.
The vast majority of the Libyan population is made up of Arabs; Berbers live in the Southwestern part of Tripolitania, and there is a Tuareg (Berbers nomads) community in Fezzan. There also are small Greek, Turk, Italian and Maltese communities.
Libya borders with Chad and Niger in the South, with Soudan and Egypt in the Southeast and with Tunisia and Algeria in the West. The Libyan coastline is 1,770 km, one of the longest among Mediterranean African countries. The climate is dry desert and mild marine at the coastline. Dust storms - sirocco called “ghibli” - happen often.
In the 5th century B.C., Carthage tried to create a Punic civilization here: Oea, Lebda and Sabratha settlements were founded at the coastline. These three cities were called Tripolis (literally “three cities”), which now is the name of Libya’s capital. In the 6th-7th centuries, Libya was part of the Byzantine Empire, and thereafter, it was conquered by Arabs and included in the Arab Caliphate. This resulted in Arabisation of the population and the expansion of Islam throughout the country. In the mid-16th century, Libya was conquered by the Ottoman Empire, and in the beginning of the 20th century by Italy, while during World War II it was occupied by Britain and France.
In 1951, Libya became an independent state, the United Kingdom of Libya, headed by King Idris I. He was overthrown on September 1, 1969 by a group of officers from the Movement of Free Officers, Unionists, and Socialists led by Captain Muammar Gaddafi, who proclaimed a republic. In 1977, the country got a new name: the Socialist Popular Libyan Arab Jamahiriya.
After having become independent, Libya managed to demonstrate significant economic progress. Huge reserves of fresh water were found under the sands of Sahara. In the 1980s, the Great Artificial River project was initiated, providing for construction of a large diameter piping system to ensure the daily supply of 6.5 million cub. m of fresh water to densely populated coastal districts. The first stage of the project was launched in 1984 with the use of cutting-edge technologies. Today, approx. 1.5 thousand km of the channel that soaks subsurface water from more than 270 water collectors (1,300 wells) and supplies more than 2 million cub. m of water per day to the Benghazi and Sirt districts has been constructed. This engineering structure, which cost more than USD 25 billion, is included in the Guinness World Records as the largest irrigational project in the world. Thanks largely to this project, several harvests of potato, cabbage, onion and tomato have been gathered, and crops are cultivated on an industrial scale in Libya (even with 90% of its territory covered by the desert!). Animal husbandry includes the farming of sheep, camel and poultry. The Mediterranean Sea supplies a wide range of seafood. Approx. 17% of population is engaged in farming in Libya, which accounted for 4.2% of the country’s GDP in 2009.
The main type of transport in Libya is the automobile. The total length of paved roads is more than 47.6 thousand km. There are more than 50 modern aerodromes in the country. Sea transport plays an important role in transportation. Libya’s own cargo fleet consists of approx. 30 vessels, including more than ten tankers. The country’s main ports are Tripoli, Benghazi, Al Bayda, Derna and Tobruk.
A range of projects for the renovation of Libya’s railway network is now at the implementation stage. The construction of a railroad from Tripoli to the border with Tunisia has commenced (opening had been planned for 2009, but did not take place). In 2008, construction of the line Tripoli - Sirt was commenced, and in the same year, Russian Railways (RZD) started construction of a 554 km line from Sirt to Benghazi. A road along the entire coastline from the West to the East of the country has also been planned.
Advantages of the Libyan economy are, first of all, the continent’s largest deposits of oil and gas. The proven reserves of gas in Libya account for approx. 1.3 trillion cub. m. According to experts, the application of new geological survey methods will allow an increase of these reserves by more than 2 trillion cub. m. The oil reserves exceed 36 billion barrels, according to the available data.
In 2004, an underwater 520 km Greenstream gas pipeline between Libya and Italy (Sicily) capable of exporting 8 billion cub. m per day was constructed.
As a result of the civil war that broke out in Libya in February 2011, Gaddafi’s regime was overthrown and he and some of his family members were murdered. The authority was taken over by the National Transitional Council. Elections to the Parliament were arranged, and the temporary Government was formed. However, new governmental authorities turned out to be incapable, basic safety measures are missing, armed conflicts between numerous armed groups and tribes continue, and centrifugal trends that threaten to break up the country are obvious. The economy, especially its oil and gas sector, incurred huge losses. Currently, Libya has terminated its export of oil and extraction by a range of local and foreign companies, including Wintershall, has dropped to zero. The forecast for normalization of the situation is vague, as the lack of centralized governance results in inactivity of almost all state institutions, including the army and police. The power is vested in “armed revolutionary brigades”, major tribes and strengthening societies of the Muslim Brothers.
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