• 3 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 6 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 8 minutes OPEC is no longer an Apex Predator
  • 12 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 2 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 2 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 27 mins California Threatens Ban on ICE Cars
  • 15 hours China Downplays Chances For Trade Talks While U.S. Plays ‘Little Tricks’
  • 20 hours Solar Industry Lays Claim To The 2020s; Kicks Off The Solar+ Decade
  • 19 hours "We cannot be relying on fossil fuels to burn as an energy source at all in our country" - Canadian NDP Political Leader
  • 2 days DUG Rockies: Plenty Of Promise, Despite The Politics
  • 1 day Iran v USA the perfect fire triangle
  • 1 day U.S. and Turkey
  • 18 hours Shell ‘to have commercial wind farms’ by early 2020s
  • 2 hours Global Warming Making The Rich Richer
  • 7 days How can Trump 'own' a trade war?
  • 2 days Dear journalists: say "climate crisis" not "climate change"
Oil Shrugs Off Trade War Threat

Oil Shrugs Off Trade War Threat

Oil markets saw a volatile…

The Driving Force Behind Nigeria’s Energy Renaissance

The Driving Force Behind Nigeria’s Energy Renaissance

Nigeria has traditionally been one…

Libya Prevents Marathon Oil from Selling its Assets

Since the fall of Muammar Gaddafi in 2011 Libya has suffered political and civil unrest, culminating in strikes at oil and gas terminals across the country, and a serious reduction in production and exports.

Worried by the continued unrest, investors have been attempting to reduce their exposure to this risk and exit the country, but Tripoli is not about to let that happen without a fight.

In July Marathon Oil announced its desire to sell its stake in the Waha Oil Company, one of Libya’s largest producers, but the Libyan government has moved to block any such efforts, forcing Marathon to remain in the country for the time being.

After making their intentions to sell clear earlier in the year, Libyan Oil Minister Abdelbari Arusi, suggested that the country’s National Oil Corp. (NOC) might buy the stake in the 350,000 barrel a day company.

Related article: Libyan Oil Production Struggles to Restart

Libyan oil contracts state that any foreign oil companies seeking to sell their stakes must first secure approval from the NOC, and give the company first refusal on the offer. Having officially discussed their plans with the NOC this week, a senior Libyan official told Reuters that Marathon decided to retract its offer to sell.

The source said that “the company has changed its mind. Marathon as a partner indicated its desire to sell its shares. It had talks with the NOC and before receiving approval, I believe things changed for the company. The last I heard the deal was off.”

A different source involved in the situation, told Reuters that the NOC had explained to Marathon that it would block any deal to sell by making use of its first refusal rights and submitting a bid far below market prices, ensuring that Marathon would make a huge loss if it continued with its plan to leave the country.

The source stated that “the NOC did not like the idea of Marathon pulling out. They thought it would send bad signals given the political climate.”

In 2009, Verenex, a Canadian oil explorer, tried to sell their Libyan assets to CNPC. In the end they were forced to sell to a Libyan sovereign wealth fund for $300 million, far less than CNPC were offering.

Related article: Libya is Improving Contract Terms to Attract more Foreign Oil Companies

Marathon is likely to find it difficult to attract buyers for the exact same reasons that it wants to leave Libya. The instability throughout the country is massively affecting the oil industry, and companies involved there; the contract terms that the Libyan government offers are unfavourable, and the Waha assets require investment.

Last month ExxonMobil managed to offload its assets in Libya, as it looked to distance itself from the difficult security situation, and last year Shell abandoned two of its blocks due to poor results.

By. James Burgess of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News