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Libya’s National Oil Corporation (NOC) has been withholding the share of crude oil that is due Total over to an ongoing dispute over the French company’s recent acquisition of a stake in the concession from U.S. Marathon Oil Corporation, Reuters reported on Thursday, citing Libyan industry and oil sources.
In early March, Total acquired the 16.33-percent stake of the Waha oil concessions held by Marathon Oil for US$450 million in cash. For Total, the deal was part of its strategy to continue to acquire low-cost resources in the Middle East, while Marathon Oil’s exit from Libya was part of its strategy to simplify and concentrate its portfolio to the high-margin, high-return U.S. resource plays.
Total has already paid Marathon Oil for the stake, but Libya and its national oil company say that the deal needed approval from Libyan authorities and any attempt to conclude the deal prior to its approval would breach the concession agreement.
Total has not yet received any of its crude oil cargoes for its share of the Waha concession, nor has it received any compensation for those cargoes, Libyan oil and industry sources told Reuters.
On a conference call for the Q1 results last week, Total’s chief executive Patrick Pouyanne said that the Libyan authorities had been informed well in advance about the Total-Marathon deal that they intended to close by the end of March.
“From a strictly legal point of view, neither in Libyan law nor in the oil concession agreement is there a request for a formal approval,” Pouyanne said.
Loading programs for May at the Es Sider port that handles the cargoes from Waha show that out of 14 cargoes in total, Libya’s NOC has 10, and the other partners in the concession apart from Total—Hess and ConocoPhillips—each have two, according to Reuters.
Trading sources and the Libyan oil source told Reuters that since the beginning of the year, Marathon’s cargoes have been sold to oil trading house Vitol via NOC, and Vitol’s deal is until at least August this year. By Tsvetana Paraskova for Oilprice.com