by Staff Writers
Tripoli, Libya (UPI) Jan 3, 2013
Amid the political upheaval of the dictator-toppling uprisings across the Arab world over the last two years, North African states are driving to open their energy sectors to foreign investment and boost oil and natural gas production.
Global energy giants are seeking to seize economic opportunities that are emerging from the political upheaval of the Arab Spring as new, more accountable governments take their place.
"It was the big finds in the Eastern Mediterranean that fundamentally changed the industry's view of the region" in 2009-11, the Financial Times observed.
The turmoil continues, especially in North Africa, as the Arab Spring turns to the Arab Winter with pro-democracy revolutions struggling to find their feet.
But, says Bill Higgs, chief executive officer of exploration firm Mediterranean Oil & Gas, "There are a lot more opportunities than there were before the Arab Spring in places like Egypt, Libya and Tunisia."
However, as new governments emerge along the North African littoral, the oil and gas reserves of Algeria, Libya and Egypt are being opened to an unprecedented degree.
Even Morocco and Tunisia, bypassed by oilmen over the years, are likely to be part of the hydrocarbons boom sweeping the region.
Tunisia and neighboring Libya, both struggling to emerge from dramatic regime changes that are still unfolding, are set to jointly develop a 678,000-acre offshore oil field in the Gulf of Gabes where their maritime borders converge.
The block, where exploration will be conducted by the Canadian energy company Sonde, includes the El Bouri field in Libyan waters and Tunisia's Ashtart and Miskar fields.
In Egypt, BP is due to initiate deep-water natural gas exploration in the Mediterranean Basin soon. Chief Executive Officer Bob Dudley says BP will invest $10 billion over the next five years.
Egypt's proven gas reserves are pegged at 77 tcf, the third highest in Africa after Nigeria and Algeria. BP's offshore project is expected to boost that by 20 percent. BP Egypt announced two new strikes in the Nile Delta in August, raising the area's total to five.
In Libya, BP is expected to start its much-delayed deep-water drilling for gas in five blocks in the Gulf of Sidra, a major oil-producing region, this year. It suspended the controversial $900 million program during Libya's 2011 civil war that ended with the death of dictator Moammar Gadhafi.
The new government, still grappling with serious security problems, has restored much of Libya's energy infrastructure, damaged or shut down during the conflict. It's almost reached the pre-war production level of 1.6 million barrels per day. But BP's Gulf of Sidra operation is seen as a potential game-changer.
Libya's gas reserves are estimated at 53 tcf, the 14th largest in the world. Some analysts say these are closer to 70 trillion-100 trillion tcf.
Paolo Scaroni, CEO of Italy's Eni, which has operated in Libya since 1959, says his company plans to invest $8 billion there over the next decade.
Eni, which produces about one-third of the former Italian colony's output, is the leading foreign oil and gas producer in Africa.
Libya has the continent's largest proven oil reserves of 47.1 billion barrels, mainly on land. It has low production costs and it's close to refineries in Europe, its main customer. But energy sector development was seriously impaired during Gadhafi's erratic 42-year rule.
If post-war security is restored -- and that's a big if right now -- production could climb.
Even after 50 years of production, Libya's still largely unexplored and the new regime seems determined to exploit its untapped reserves.
Algeria, with reserves of 12.2 billion barrels of oil and 159 tcf of gas, has avoided much of the Arab Spring turmoil. But the military-backed government has been forced to introduce major reforms to head off trouble and open up the oil and gas sector, the country's economic mainstay.
Although Algeria's a major African producer, it's still considered to be relatively under-explored.
State oil company Sonatrach says it will boost a planned investment for its 2012-16 from $62.2 billion to $80 billion and will revise hydrocarbon laws to attract more foreign investors.
Sonatrach, which has been badly shaken in a political power struggle, is soon to sign agreements with Royal Dutch Shell and Exxon Mobil to develop recoverable shale gas reserves estimated at 600 tcf.
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