A Total led European consortium has agreed to slash its stake in two Libyan oil blocks to 27% from 50% to give a bigger share to Libya’s state National Oil Corporation (NOC), NOC has said. “Under the renewed contract, it is also agreed that the share of the foreign partner in gas production will be cut from 50% previously to 40% and then to 30% in a future stage,” NOC added in statement posted on its website.

The deal converting existing contracts, which involves C137 and al-Jurf blocks was signed last Thursday in Tripoli, it added. Al-Jurf oilfield has an output capacity of 45,000 barrels per day.

Germany’s Wintershall and Norwegian major Statoilhydro are the partners in the Total-led consortium, according to the NOC statement.

“The deal is a part of NOC’s policy to renew existing accords to expand the share of Libya in oilfields production, increase productivity of oilfields and exploration capabilities,” the statement said. The renewed accords also aim at “developing fields, transfering technology and sharing management and winning upfront payments for signing deals,” it added.

It gave no details on the payment of signing bonus by Total in the renewed deal. Libyan officials have said that bonus would amount to $500 million.

Libya earned $5.4 billion in additional oil revenues from changes to contracts with four foreign companies last year, NOC said in report made public early this year.

NOC quoted its chairman Shokri Ghanem as saying Libya, encouraged by soaring oil prices in 2007 and early 2008, began negotiations with oil firms to change existing contracts into a new deal called Fourth Type of Partnership Agreement to increase Libya’s stake in oil operations and cut shares of foreign firms.

OPEC member Libya plans to nearly double crude oil production by 2012 with an investment of $30-$40 billion. It pumps about 1.7 million barrels per day of oil.

(energy-pedia)