Libya’s National Oil Company (NOC) stated that Wintershall Dea is going to invest in exploring Libya’s Sirte basin as its oil concession in Libya is converted to an EPSA IV format, according to Oil and Gas Middle East.

Wintershall Dea, through its affiliate Wintershall Aktiengesellschaft (WIAG), renegotiated with Libya’s NOC about a signed Memorandum of Understanding (MoU) in August 2010. Consequently, the two parties concluded the renegotiations by signing two exploration and production sharing agreements (EPSAs); one for Area 91, extended until 2036 and for Area 107 until 2037.

“NOC is proud to be a true and faithful guardian of the oil wealth to the Libyan people. We are pleased to start a new chapter of cooperation with WIAG, which has been operating in the Sirte Basin since 1966,” Mustafa Sanalla, NOC Chairman said.

It is worth noting that the agreements are mainly for the conversion of WIAG’s Concessions 96 (currently named Area 91) and 97 (currently named Area 107) to EPSA IV format, which takes retroactive effect as of January 1, 2008.

Under the agreement, WIAG is set to pay $150 million for corporate social responsibility and development (CSR) and will carry out the exploration activities at its own cost and bear half of the development cost.

Furthermore, NOC and WIAG has agreed on establishing a joint operating company (JOC) named Sarir Oil Operations Company (SOO), in which WIAG will be responsible for operations in the areas included in the contracts for a transitional 6-month period, after that SOO will be responsible for operations in both areas.