LIBYA - Agip North Africa & Middle East.

Agip, an operator in Libya since 1959, has a number of blocks where it is exploring for oil and gas. It produces oil from Bu Attifel and the Rimal-Khatib group onshore and El Bouri offshore. Agip NAME is a wholly-owned ENI company registered in the Channel Islands.

Agip NAME's oil production capacity has fallen from 320,000 b/d in 1992 to 220,000 b/d, because it has not been able to import adequate EOR equipment. The worst affected is the Bu Attifel field, a giant requiring a water injection system because reservoir pressure has begun to fall since 1994. It is said that even if it manages to install an advanced EOR system at Bu Attifel, Agip's sustainable capacity is not likely to change much in the near future; but it would prevent a major fall in reservoir pressure.

Bu Attifel was discovered in 1968 at 14,300 feet in the eastern side of the Sirte Basin and was put on stream in late 1970. One of the deepest fields in Libya, it produces oil of 41o API gravity. It has a total of 39 wells, of which about 30 are producers. Its capacity has declined from 170,000 b/d to less than 100,000 b/d, due to a rapid fall in reservoir pressure.

Of the five discoveries made in Libya in 1990-1994, two were oil-rich structures near Bu Attifel found by Agip. The first one was found east of Bu Attifel and tested about 11,000 b/d of oil from the Nubian sandstone at 15,800 feet. The reservoir was said to contain 300m barrels. The second find south of Bu Attifel tested 5,000 b/d, with oil in place estimated at over 500m barrels. But the US and UN sanctions have made it difficult for Agip to restore Bu Attifel's production level to 170,000 b/d and raise it to 240,000 b/d by 2000, as was intended in early 1990.

Rimal-Khatib are small oil structures near Bu Attifel found by Agip in 1965 at 14,000 feet. Their output is added to that of Bu Attifel.

A $234m gas separation and treatment plant at Bu Attifel started operating in late 1993. The plant was built by Snamprogetti and Bonatti in two years and four months. It has the capacity to treat 384 MCF/day of dry gas, with 291 MCF/day coming from Bu Attifel and 93 MCF/day from the Nafoorah and Jisarah fields, as well as produce 25,000 b/d of condensates. The gas is transported by a 132 km pipeline to Marsa El Brega. As part of Bu Attifel development projects initiated since 1990, NOC has built a 140 km pipeline carrying 30,000 b/d of condensates from Bu Attifel to the coast.

El Bouri field, in the Pelagian (Tripolitanian) shelf, is Libya's first offshore field with a huge cap of gas. Discovered in 1976, it is located on Block NC 41-B, a 37,700 sq km tract in the Libyan sector of the Gulf of Gabes. El Bouri lies under the sea at a depth of 8,700 feet, producing 26( API oil. It is under about 170 metres of water, 150 km north-west of Tripoli. The field covers an area of 32 km by 5 km. It is said to contain about 4-5 bn barrels of oil and 2.5 TCF of gas in place. Of the oil deposit, recoverable reserves have been estimated at about 650m barrels. The field is near the 7th November Block which is equally owned by Libya and Tunisia and is being explored by a Nimir-led JV.

El Bouri came on stream in August 1988 at the rate of 12,000 b/d. A $2 bn development programme had been agreed between NOC and Agip in March 1983. The first phase involved the drilling of 50 wells from two offshore platforms (DP3 & DP4) supplied by Belleli and Micoperi for $230m. By end-1988 production had risen to 20,000 b/d. In 1989 it rose to 60,000 b/d, after 23 new wells were hooked up. Another 27 wells drilled in 1990-91 raised capacity to 70,000 b/d by mid-1991. Drilling, processing and service units for the platforms were provided by Saipem and Hyundai under a $155m contract. A 1.3m barrel floating oil storage and mooring facility was supplied by Equipements Mecaniques et Hydrauliques of France. John Brown Offshore of Britain was the project manager.

In Dec. 1993, Agip signed a wide-ranging agreement with NOC under which, among other things, it was to embark on a second phase for El Bouri to expand its capacity to 150,000 b/d. This required the drilling of 55 more wells from three new wellhead platforms - DP1, DP2 and DP5. The target was reached in 1995. But the field's output fell later because it required EOR facilities and now it is averaging less than 70,000 b/d.

El Bouri has had a high gas/oil ratio of some 800-900 cubic feet/barrel, which limits its recovery rate. The ratio was reduced in 1992 after the drilling of six horizontal wells. Since then there have been plans to bring the ratio down to about 600 cubic feet/barrel with a 15-well horizontal drilling project.

The Dec. 1993 agreement with NOC improved the E&P terms to the extent that Agip was encouraged to expand El Bouri and acquire several blocks in the Ghadames and Sirte Basins. The new terms reportedly included an increase in Agip's share of El Bouri's oil production from 19 to 30%.

Under the same deal, Agip did a feasibility study for the development of gas-rich offshore Block NC-41, adjacent to El Bouri, El Bouri's gas reserves and an onshore field called Al Wafaa. Al Wafaa, found in 1991 by NOC's Sirte Oil Co., straddles the border with Algeria in the Ghadames Basin and is an extension of Algeria's Alrar gas field. (In August 1997, Agip made a gas discovery on its Ghadames Basin Block NC-175, with the wildcat drilled to a depth of 2,524 metres about 39 km south-east of Algeria's Alrar field and Al Wafaa. The well tested 16.26 MCF/day of gas from a Memouniat formation).

The study, completed in late 1995, gave a very positive conclusion. It recommended development of NC-41's and Bouri's gas reserves and those of Al Wafaa for a stream of 10 BCM/year by late 2003 and export of 8 BCM/y to Italy through a marine pipeline. NOC subsequently approved Agip's plan and the two agreed for the Italian company to develop both Al Wafaa and NC-41. Al Wafaa's development was under a separate deal with NOC.

NC-41, 550 km west of Tripoli, contains oil and a giant gas deposit in a Pelagian Basin having characteristics partly similar to that of El Bouri. In April 1995, Agip said it tested 900 b/d of oil and 16 MCF/d of gas on the block in a well drilled to appraise a Metlaoui formation at a depth of 2,499-2,518 metres. Later in that year it tested 21 MCF/d of gas at a depth of 2,615-2,637 metres from a well called "Scarabeo 3". On the basis of these and earlier tests, Agip's proposed development of NC-41, Bouri and Al Wafaa reserves - in one programme called Western Libya Gas Project (WLGP) - was approved in March 1996 by the General People's Committee (Libya's parliament). An accord to develop the reserves and to export gas to Italy was signed in June 1996 between NOC and Agip.

Agip Gas BV (an Agip-NOC JV) on Feb. 9, 2000 signed a 24-year contract to supply Edison Gas of Italy with 4 BCM/y. Later it signed deals to supply Gaz de France with 2 BCM/y and Energia Gas with the remaining 2 BCM/y. The development and pipeline projects, including the marine line to Sicily, required about $5.5 bn. By mid-1999, Agip had spent $500m on the project, including the cost of several wells drilled, and was expected to invest another $3 bn.

On Dec. 9, 1999, Technip Geoproduction signed a $100m contract to provide project management and front-end engineering and designs (FEED) services for the whole $5.5 bn programme including a 600-km, 32-inch gasline to Italy and a 10 BCM/y onshore gas and condensate processing plant at Melitah in northern Libya. The latter plant will supply the domestic market with 2 BCM/y of gas and Italy with the other 8 BCM/y. It will also supply the condensates to the domestic market.

Agip consolidated its position in Libya with its takeover of Lasmo in Dec. 2000. This gave Agip a majority stake in the giant Elephant field in the Murzuk Basin which will be on stream in the fourth quarter of 2001 and will eventually produce 150,000 b/d (see below). Agip has bid for prime acreage in the M1 part of the Murzuk Basin, in partnership with Teikoku Oil of Japan and Petronas of Malaysia.

Repsol/YPF of Spain, in Libya since 1994, has become the second biggest foreign producer of oil in Libya, with an output averaging 150,000 b/d from Al Sharara field. It has developed this field to a capacity of 175,000 b/d rising to over 200,000 b/d in 2002. With proven recoverable reserves estimated at 100m barrels, oil in place is put at 2-5 bn barrels.

The field lies in the Murzuk Basin S-W of Libya in the 4,275 sq km Block NC-115, 800 km S of Tripoli. The light/sweet Sharara crude oil is exported by pipeline through the Zawiya terminal west of Tripoli, with direct exports having begun in mid-1998. Repsol has spent over $1 bn on developing the field. It put its first phase on stream in late 1996 at 50,000 b/d. In January 1999, Repsol found light/sweet oil near Al Sharara and the M1 well flowed at 2,500 b/d. The new reservoir was said to contain up to 200m barrels. Repsol holds 40% in NC-115 and its partners are TotalFinaElf (30%) and OeMV (30%). NOC owns 50% of the fields, as in the case of other operations involving foreign companies.

In early November 1997, Repsol signed an EPSA with NOC for Blocks NC-186, NC-187 and NC-190 in the Murzuk Basin close to NC-115. Holding 32% in this, the Spanish company as operator was to do seismic survey and drill wells and to spend up to $20m per annum over five years. Its partners are TotalFinaElf (24%), OeMV (24%), and Saga Petroleum Mabruk - now part of Norsk Hydro - 20%). On Nov. 10, 1999, Repsol and its partners signed an EPSA with NOC for Block M-4 in the same basin to the north of NC-186. This raised the Repsol-operated acreage in the Murzuk Basin to 47,300 sq km.

Exploration of NC-186 so far has been 100% successful, with significant quantities of high quality oil found in all the three wells drilled. The first find was announced on Nov. 29, 2000, as well A-1 flowed at 2,500 b/d of 41( API oil, and was only 20 km away from Al Sharara field. The second, well B-1, 30 km to the west of A-1, flowed at 1,300 b/d of 40( API oil and was announced on March 16, 2001. The third discovery was made in May, as A-2 well flowed at 2,670 b/d of 41( API oil on a 64/64-inch choke. Repsol said it was a "significant oil column" in the middle Ordovician sandstone of the Hawaz formation. Another seven wells will be drilled on the block, three exploration and four appraisals.

NC-186, just north of NC-115, only covers 4,300 sq km. But it is ideally placed as the export pipeline from Al Sharara field runs horizontally through to the north, and Repsol has spare processing and export capacity. NC-190 is just to the north of this rich block and the export pipeline runs through it as well. So oil finds at NC-190 could be tied into Repsol's production system within a short period, as in the case of the NC-186 discoveries.

Veba Oel Libya operates several small fields and the mature giant Amal which is depleting rapidly. Their total output has fallen from 85,000 b/d in 1992 to 80,000 b/d but their capacity is 90,000 b/d. Amal was found in 1959 at a depth of 9,900 feet. It lies in the north-east of the Sirte Basin about 200 km south of Benghazi. It produces about 50,000 b/d of 37.5( API oil with a high wax content as well as some associated gas. Gas lift facilities have been built at the field as part of an expensive EOR system. But the field's oil output has declined considerably in the past five years. Veba has revamped the seven oil gathering units that form the field's production system. Crude oil from Amal is piped to Ras Lanuf terminal, with the gas piped to Umm Al Gawabi.

Ghani, found in 1978 at 6,000 feet, produces oil of 40( API. Later Veba found two other fields nearby. Now Ghani, Zainat and Zala are producing about 15,000 b/d. Hofra was the first field to be discovered in Libya in 1958, with exploration in this country having begun in 1955. It produces 4,000 b/d. Ora, discovered in 1962 at a depth of 7,250 feet, produces 5,000 of 40.2( API oil. Ora is linked by pipeline to Ras Lanuf. Faroud is a small field with an EOR system. Veba in late 1988 was allowed to increase its E&P partnership with NOC to 49%, from 17%. Then several German companies became involved in new contracts for upstream development.

Veba Oel Libya is part of Veba Oil & Gas which was created in 1998 after the break up of Deminex group. At the time, Deminex was owned by Veba Oel, BASF and RWE of Germany. The split resulted in Veba, Deminex's largest shareholder, taking over the vast majority of the group's regional assets. To align its upstream and downstream operations, Veba Oel then set up three divisions: Veba Oil & Gas focusing on E&P, mainly in North Africa and the Middle East; Veba Oil Refining and Petrochemicals; and Aral, marketing and trading in petroleum products. Veba first moved into North Africa in 1958, when it bought a 25% stake in Mobil's Libya concessions, and it was then known as Gelsenberg.

Wintershall, a unit of the German petrochemical giant BASF, operates five fields in Blocks NC-96 and NC-97 in the Sirte Basin. Their production is averaging 70,000 b/d and their capacity is 80,000 b/d. Wintershall also has 25% in the offshore Block NC 137, where exploration is progressing.

Wintershall's biggest field is As Sarah in the Jakhira zone, 450 km south-east of Benghazi, which it found in January 1989 on Block NC-96. The field's reserves were then estimated at about 250m barrels. Its first phase was completed in November 1990 and consisted of four wells. The second phase involved another 10 wells and was completed in 1993, when the Jakhira production and its gas/oil separation plant (GOSP) was expanded. Now it produces about 50,000 b/d and Wintershall puts the field's reserves at 400m barrels of oil and 200 BCF of gas in Triassic sandstone of the pre-Upper Cretaceous B (PUC-B) unit. In June 1995, Wintershall brought on stream the Al Nakhla field, which has since reached over 20,000 b/d. In 1992, Wintershall was only producing 15,000 b/d.

On Aug. 17, 2000, Wintershall plugged and abandoned exploration well G-1-96 near As Sarah. It was spudded on June 8 and encountered an Upper Cretaceous PUC B formation at a depth of 4,639 metres while drilling to 4,707 metres. In May 2000 it had abandoned well F-1-96 in the same area after conventional coring indicated yellow fluorescence and oil shows.

TotalFinaElf of France is producing 20,000 b/d from the Mabrouk field in the Sirte Basin. Found in 1959 by Exxon, the field was left undeveloped for over three decades because of its highly-fractured nature, low-pressure reservoir and low oil-gas ratio. Development costs were then estimated at $1 bn. The field's reserves were put at 1.3 bn barrels of 35-40( API oil.

Total signed an accord with NOC in late 1993 to develop the field. It brought on stream in June 1995 a pilot EOR system based on water injection, enabling the field to produce at 2,000 b/d. This has since risen steadily. Development work has included the drilling of horizontal wells. Total has a 75% working interest. Saga Petroleum holds 25%, which it acquired in mid-1994.

Having since taken over Fina and Elf Aquitaine, the French group now is developing the B field of offshore Block 137. The field, found in 1975 by Total and confirmed in 1998, is in 90 metres of water about 100 km off the coast. The field is to be on stream in early 2003 with an eventual capacity of 35,000 b/d of 38( API oil. TotalFinaElf holds 75% in this with Wintershall having 25%. A well platform is to be installed and connected to a floating production storage and offloading (EPSO) vessel. The field's five well drilled indicate about 150-200m barrels would be recoverable.

In 1998, Total began exploring two blocks next to Al Sharara oilfield in the Murzuk Basin. In Late May 2001 NOC and TotalFinaElf ratified an EPSA for new acreage in Blocks NC-191 and NC-192, covering a total area of about 16,600 sq km, in the Murzuk Basin. NC-192 also includes a 1,200 sq km area in the Sirte Basin.

Red Sea Oil Corp. of Canada, part of Lundin Oil of Sweden and known locally as International Petroleum Libya (IPL), can produce about 15,000 b/d of 41( API oil from En Naga North and West fields, which it found in Block NC-177 in the south of Sirte Basin in 1997-98. The fields first went on stream in the first quarter of 2001. A second phase of development is to bring the fields' capacity to a sustainable level of 24,000 b/d by early 2003. IPL has said the fields had proven reserves of 100m barrels.

Now three production wells are in operation at the fields. Another five wells are to be drilled before 2001. Central processing facilities and a 100-km link to a crude oil pipeline to the Es Sider export terminal on the Gulf of Sirte are being built by Tunisia-based Petroleum and Industrial Realisation Contractors (Pireco) under contracts awarded on Feb. 26, 2001.

IPL in early 2001 abandoned drilling at well E-1 on block NC-177, because this did not provide proof of commercial quantities of petroleum. It said it was to focus on the development of another part of NC-177. (IPL's exploration commitments ended with the drilling of the E-1 well. But the company said subsequently that it was looking at further exploration investment).

On June 21, 2001, Petro-Canada said it signed an agreement to acquire a 25% interest in NC-177 for $75m from Lundin Oil. Petro-Canada then was quoted as saying: "This acquisition reflects our position in North Africa. Libya is, politically and economically, a stable country and the Libyan government has a very good track record dealing with oil and gas companies".

Also in June Talisman of Canada made an offer of $3.43 per share for a takeover of Lundin Oil, in a deal which press reports said would be worth around $344m. In mid-2000 Lundin Oil and Edison Gas of Italy had formed a partnership to bid for E&P blocks in Libya. Edison is to import Libyan gas by pipeline, with the gas to be available from early 2004.

OeMV of Austria has been in Libya since 1985, when it bought 25% of Occidental's operations for $110m. These included Oxy's oil-rich Blocks 102 and 103 in the Sirte Basin. OeMV's output now averages only about 10,000 b/d from several small fields in the Sirte and Ghadames Basins, down from 40,000 b/d in 1992.

After Oxy left in June 1986, OeMV raised its E&P stake in Libya. In 1988 it found oil in Block 103. This flowed from one of four wells it had drilled in 1987. It developed the discovery in the subsequent years.

On Aug. 5, 1989, OeMV and partners signed EPSAs covering: Block NC-162 in the Ghadames Basin, 6,558.23 sq km, in which OeMV as operator had a 40% working interest, with Braspetro of Brazil holding 30% and Husky Oil of Canada holding 30%; Block NC-166 in the Sirte Basin, 10,590 sq km, in which Braspetro as operator held 40%, with OeMV and Husky holding 30% each; and Blocks NC-163, 164 and 165 in the Sirte Basin, 3,506.7 sq km, in which OeMV as operator had 51% and Husky held 49%.

In mid-1992, OeMV found 37( oil in Block NC-163 at 3,200 metres and the well tested 3,200 b/d. The field, 350 km south of Benghazi, was pronounced commercial and was put on stream in 1996. In January 1993, this block was estimated to contain 3m tons of reserves.