LIBYA - Lasmo Venture.

Lasmo of the UK, taken over by ENI of Italy in December 2000, is developing the Elephant field. This is a giant located on Block NC-174 in the Murzuk Basin. The field is to be on stream in early 2002 with an initial capacity of 50,000 b/d.

The capacity is to be raised quickly to reach or exceed 150,000 b/d by early 2003. ENI, having consolidated its position in Libya with the acquisition of the independent UK firm, hopes Lasmo's production could reach 300,000 b/d by 2005 so that total output by the Italian group's operations in the country exceed 500,000 b/d.

Initial production will begin as soon as preliminary export facilities become ready. Lasmo has come to an arrangement to use the Repsol/YPF's link to the country's crude oil export pipeline on a temporary basis.

Lasmo in June 2001 tendered its $500m development project in four independent packages as follows: (1) a 75-km, 24-inch crude oil export pipeline from the field's planned gas/oil separation plant (GOSP) to the facilities of Repsol/YPF at NC-115, and into the existing 31-inch export pipeline, plus 11-inch trunklines from the A and B well pads to the GOSP; (2) a 132-kV overhead power cable running from NC-115 to the NC-174 GOSP, together with electrical transformers and an 11-kV cable supplying the field's well pad area; (3) construction of amenities to accommodate and support a staff of 130, including sewerage treatment, drinking water and canteen facilities; and (4) fast-track construction of oil processing facilities and the GOSP with the capacity of 50,000 b/d in the first phase, with the options of raising the output to 150,000 b/d in the second phase and 200,000 b/d later.

In May 2001, Athens-based Joannou & Paraskevaides (J&P - Overseas) received a letter of intent from NOC for the contract to build a 40-km, 6-metre wide service road in that part of the Murzuk Basin. The project is being co-ordinated by Lasmo. This road is needed before work on the field's pipeline and processing facilities begins.

Lasmo's discovery well in Oct. 1997 flowed at almost 10,000 b/d of 39( API oil and was the largest find in Libya since the mid-1980s. It is 70 km south of a new oil pipeline from the adjacent Al Sharara field to Zawiya. The Elephant field and discoveries made by Lasmo in the same block are said to contain about 1.5 bn barrels in place, with proven recoverable reserves recently put at 600m barrels.

It has been estimated that full development of Elephant, together with new dedicated export facilities and other ligistics, could cost almost $5 bn. This would enable Lasmo eventually to produce 300,000 b/d.

Lasmo holds a third in NC-174, with Agip and Pedco of South Korea each having another third. The same partners have Block NC-173 in a nearby section of the Gulf of Sirte.

The 7th November Block, offshore in the Gulf of Gabes, is rich in oil and gas and is owned by the Libyan-Tunisian Joint Oil Company. (JOC), a 50-50 venture of NOC and Tunisia's state oil company Etap. JOC is based on Djerba island. JOC was formed in May 1988, after a territorial dispute over the block between Tunis and Tripoli ended after a ruling by the International Court of Justice. It took many years for real work on the block to begin. The block was awarded in early 1997 to Nimir Petroleum Co. North Africa (a private Saudi firm), Petronas of Malaysia and Medex Petroleum of Tunisia to explore the 3,000-sq km block and later to develop the reserves which can be proven. The deal was ratified on May 5, 1997.

Nimir began seismic studies in April 1998. It was to drill at least three wells and spend $30m. The company drilled the first well in the second half of 2000. Shows then were established to be commercially unviable. It began drilling a second well in March 2001

Nimir is the operator, holding 55%. JOC will take 39% of any profit. JOC says the block has a minimum of 260-300m barrels of oil and 250 BCM of gas. This is just north of El Bouri, south of the Isis gas field and west of Tunisia's Miskar gas field which BG has developed.