TRIPOLI,(Reuters) – French oil major Total has agreed to halve its 75 percent stake in two Libyan oil blocks as part of a contract renewal with the north African country’s National Oil Corporation (NOC).
Total said it had signed a memorandum of understanding with the NOC converting existing contracts on blocks C17 and C137, in which Total had a 75 percent interest, into a new production sharing agreement, Total said in a statement.
Under this new contract, the NOC will own 50 percent of the blocks, leaving 50 percent to foreign oil companies. Total will hold 75 percent of the 50 percent stake allocated to foreign oil companies — or 37.5 percent of the total block.
The signing comes days after Libya’s main state newspaper urged the country’s Basic People Congresses, Libya’s top executive and legislative bodies, to vote to nationalise foreign oil firms at their next meeting.
The newspaper argued nationalisation would help Libya adapt better to fluctuating oil prices.
A spokeswoman at Total declined to comment on whether the signature of the MOU was linked to a push by Tripoli to regain ownership of its oil resources.
“The agreement of understanding signed by NOC and Total on Monday changes the contract terms and the conditions to adapt them to changing conditions of the economy, with the increased prices of oil for the period between 2006 and 2008,” NOC said in a statement on its website.
The altered accords involve Al-Jurf oilfield, with an output capacity of 45,000 barrels per day, and Mabruk oilfield, it added.
“It was agreed that the Libyan side gets a bigger share and the payment of accord signing bonus of $500 million,” NOC added, but gave no precise details on the new share Libya won.
But NOC said early last month contract changes made with four other foreign firms include among other measures reducing their production shares to 10 percent or 15 percent.
Libya earned $5.4 billion in additional oil revenues from changes to contracts with four foreign companies last year, NOC said in its report made public last week.
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.