LIBYA - NOC Operations.

NOC has a number of fields and is engaged in exploration. Its four operating subsidiaries run fields taken over from foreign companies. These include fields which used to be operated by US companies and accounted for the bulk of Libya's 3.3m b/d oil production capacity in 1970. At times in 1970 Libyan production rose to 3.7m b/d. Unless the US sanctions are lifted, NOC's units may not be able to raise their capacity to 1.15m b/d by 2006.

The head of production at NOC, Abdel Rahman Abdullah, was in March 2003 quoted as saying Libya's oil production capacity was 1.8m b/d. He said this will reach 2m b/d over the next two to three years.

In reality, however, NOC's four operating units face reservoir problems. The fields they are operating are on a steady decline. According to the London publication Business Monitor International (October 2002), these fields "are declining at an annual rate of 7%". It said that, in order to achieve the capacity increases sought, it "will have to attract US$10 bn of foreign investment".

NOC directly finances development in fields operated by its subsidiaries and the fields in which five US companies still in theory have rights. NOC also finances exploration work carried out by its subsidiaries. Since 1990 NOC has embarked on the following EOR and field development projects - some of which delayed due to the sanctions:

- An EOR programme based on water injection at the Sarir field, for which a contract was signed in 1990 between the field's operator Arabian Gulf Oil Co. (Agoco) and Mannesmann of Germany, to increase its production capacity from 200,000 b/d up to 600,000 b/d. But work was stopped after the UN's April 1992 embargo as Mannesmann, scaling down its involvement in Libya, terminated the contract. Some limited work on the field was contracted subsequently and Sarir's capacity is not likely to expand beyond 250,000 b/d by 2004.

- A further development of the offshore El Bouri field, on Block NC-41, operated by Agip North Africa Middle East (NAME) on a production-sharing basis, to raise its capacity from 70,000 to 150,000 b/d by 1992. There, too, work was very slow and the target was only partly attained in 1995. But reservoir pressure at El Bouri fell again in 1996 and in the subsequent years production dropped to 70,000 b/d. (El Bouri's associated gas reserves have been estimated at 70 BCM. There is also a big gas cap over El Bouri's oil reservoir, which is being developed as part of a 10 BCM/year stream to be ready in 2004).

- Construction of a 140 km pipeline to carry 30,000 b/d of condensates from the Bu Attifel field, operated by Agip, to the coast. The completion of this project was also delayed.

- Boosting the production capacity of Bu Attifel, also operated by Agip, from 160,000 to 240,000 b/d, together with the construction of a gas treatment plant to process about 300 MCF/day of dry gas and 25,000 b/d of condensate. But work on all this was very slow and now Bu Attifel and satellite fields are producing less than 100,000 b/d.

- Developing two new gas fields onshore, owned by NOC, known as Attahaddy (defiance) and Assumud (steadfastness). Work on these has progressed.

- Developing several oilfields: one in the Murzuk Basin which was done by Repsol of Spain and the field went on stream in late 1996, Kebir near the Tunisian border operated by Agoco, and Mabrouk in the Sirte Basin where Total has installed an EOR system.

- Exploration and field development in the offshore 7th November Block, a 3,000ysq km tract in the Gulf of Gabes jointly owned by Libya and Tunisia. The company in charge, called Joint Oil Co. (JOC), awarded the E&P deal for this on Feb. 1, 1997 to a partnership of Nimir Petroleum of Saudi Arabia and Petronas Carigali of Malaysia (see Gas Market Trends).