After half a year of civil war, Libya is open for business once again, with its most important industry taking the lead.
Foreign oil companies return to Libyan fields
Foreign oil companies are returning to Libya to revive its most important industry after half a year of civil war.
An offshore field operated by a Total joint venture was due to start pumping yesterday and could begin exporting in as little as three weeks, an executive told Dow Jones.
Meanwhile Austria's OMV is set to redeploy foreign staff within days.
"Our people will go into Libya next week," Gerhard Roiss, the chief executive of OMV, told Bloomberg News on Thursday. "As we see it, the situation is quite stable."
The Libyan state-controlled Arabian Gulf Oil Company restarted some production this month but OMV and Total are the first international companies to do so.
OMV, which is one-fifth owned by Abu Dhabi, reported a 26 per cent drop in profit earlier this year in part because of the Libyan shutdown.
Government officials as well as the chief executive of the Italian producer ENI have travelled to Tripoli recently to make sure their interests will be looked after in the new Libya.
"They're all trying to go in as quickly as possible," said Samuel Ciszuk, the Middle East energy analyst at IHS Global Insight in London. "They want to rebuild."
The National Transitional Council, the interim government operating out of Tripoli and Benghazi, has said it would honour contracts from the old regime.
It is due to announce a new cabinet as soon as next week, officials said this week in Dubai.
Libya, an Opec member country, was pumping about 1.6 million barrels per day (bpd) before the conflict,which with natural gas accounted for the majority of the government's revenue.
Its light, sweet crude represents 1.5 per cent of global supply, and producers and consumers alike are closely watching for its return to the market, which analysts say could take as long as three years.
Al Jurf field, however, the offshore site operated by the Total joint venture, could hit its full capacity of 41,000 bpd within 10 days, Ahmed Abulsayen, the chairman of the joint venture's operators committee, told Dow Jones on Wednesday. It exports via an offshore terminal. Total was not available for comment.
Another location where analysts are expecting a quick restart are the NC 96 and 97 fields, operated by Germany's Wintershall. The offshore fields produced about 80,000 bpd before the conflict.
"We will start production operations again when the security situation allows us to do so," said Stefan Leunig, a spokesman for Wintershall.
But prospects in the Sirte Basin, a stronghold of the old regime where damage to oil infrastructure has not been fully assessed, remain more uncertain.
Another company mulling a return is BP, which had been preparing to start deepwater exploratory drilling in the Gulf of Sirte in February when the uprising began.
"We have to build a new relationship with the new government, so it's obviously not just a matter of when we choose to go in," said Robert Wine, a BP spokesman.
* With agencies