Africa Oil & Gas: Libya Security Environment Still ‘Deeply Fractured’
Total S.A.’s recent acquisition of Marathon Oil Libya Limited is a sign of gradual improvement in investor sentiment towards Libya, but a larger uptick in investment is unlikely until more substantial political progress is made.
That is the view of oil and gas analysts at BMI Research, who highlighted in a brief research note that the security environment in the country is still ‘deeply fractured’ and risks remain high.
“Various groups looking to gain leverage on the government have repeatedly targeted oil and gas infrastructure,” the analysts stated. “Substantial damage has been inflicted on production facilities, storage units and pipelines and supply disruptions are a recurrent feature of the market,” they added.
The analysts said they expect to see progress on the domestic political front but warned that this would be gradual.
“Steps are being taken to pave the way for presidential and legislative elections, although the 2018 deadline is, in our view, likely to be missed,” the analysts said.
“The political space is highly fragmented and consensus-building between the various factions is hard to achieve. The broader peace process remains challenging and it will be a number of years before stability can be re-established on the ground,” they added.
Marathon Oil Libya Limited holds a 16.33 percent stake in the Waha concessions in Libya. These concessions currently produce around 300,000 barrels of oil equivalent per day (boepd), and output is expected to exceed 400,000 boepd by the end of the decade, Total confirmed.
“This acquisition is in line with Total’s strategy to reinforce its portfolio with high quality and low-technical cost assets whilst bolstering our historic strength in the Middle East and North Africa region,” Patrick Pouyanné, chairman and CEO of Total, said in a company statement following the purchase of Marathon Oil Libya Limited.
“It builds on the group’s long-term presence in Libya, a country with very large oil and gas resources, and demonstrates our commitment to continue supporting the recovering oil and gas industry of the country,” he added. source: Rigzone
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