By Rupert Neate
Nuri Berruien, head of Libya’s National Oil Company, said the government would ‘favour our friends’ to develop its reserves
Libya began touting itself as the next Dubai to UK investors, as the country’s government said it would reward its “friends” when it begins selling off lucrative oil contracts.
Representatives of the country’s National Transitional Council called City executives to a central London hotel to drum up British interest in the “massive opportunities” on offer in Libya.
Oil companies, and their lawyers, have kept a close eye on Libya’s vast reserves, which accounted for more than 95% of the country’s exports before the popular uprising against former dictator Muammar Gaddafi.
Nuri Berruien, head of Libya’s National Oil Company, said that the country’s government would “favour our friends” when awarding new contracts to its 46bn barrels of untapped oil reserves – the largest in Africa and eighth largest in the world. But he said it was unlikely that any new contracts would be granted before an elected government takes over from the NTC.
The transitional government has said existing contracts with oil firms, including BP, Shell, Eni and Total, will be honoured unless it finds evidence of corruption in the awarding of the contracts under the former regime.
Berruien said Libya’s daily oil production, which stands at 600,000 barrels, is expected to hit 800,000 by the end of the year and return to pre-war levels of 1.6m by the end of 2012. Virtually all of Libya’s oil is exported.
Representatives of international oil groups were told the best way to exploit Libya’s oil wealth is to go into partnership with a local operator. Under the country’s laws foreign oil firms may own up to 65% in joint ventures with local operators.
Heritage Oil, the FTSE 250 oil exploration firm run by Tory donor and former mercenary Tony Buckingham, became the first new entrant into the Libyan oil market since the fall of Gaddaffi when it bought a 51% stake in Sahara Oil Services Holdings for $19m (£11.9m) last month.