VIENNA,(Reuters) – A new council set up in Libya to oversee and direct oil and gas will not change policy and should not make the country any less attractive to foreign investors, the head of Libya’s oil industry said on Saturday.
Libya’s government earlier this month announced the creation of a Council for Oil and Gas Affairs.
The announcement, shortly after Libyan leader Muammar Ghaddhafi gave a speech calling for greater Libyan involvement in the oil sector, raised concerns among some analysts.
They said the North African producer could be following the example of countries, such as Venezuela, that have been making conditions tougher for foreign operators.
“It is not going to hamper or slow things down. It is not going to create red tape. It could even expedite things,” said Shokri Ghanem, head of Libya’s National Oil Corp.
“Rather than everything going to the council of ministers… this is a small consultative committee …It’s not going to be less attractive (for foreign investors),” he said. “The days of conservatism are gone.”
He also said it would not affect an international licensing round launched in August, which is Libya’s third since the lifting of most international sanctions against the country.
Analysts have said much of the acreage on offer in the third round was in frontier areas and the risk was it might not yield much oil.
But Ghanem said it had attracted great interest and that more than 150 companies had attended a road show in London.
Oil executives have been tantalised by the possibility it could be the prelude to a far more attractive development round, possibly next year, which would allow them to help develop proven major fields.
Ghanem said it was not unrealistic to say a development round could take place as early as next year, but said it could take time.
“Development is not as easy as exploration and production,” he said.
Ghanem was speaking in Vienna as delegates gathered ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) on Monday, which is widely expected to leave current production levels unchanged.
However, OPEC President Edmund Daukoru said on Saturday he was concerned about falling prices and the issue would be discussed at the its meeting.
Ghanem has said OPEC was unlikely to change its production ceiling for now, but would monitor the situation.
“We have to watch the market closely, then we will act accordingly.”
Looking ahead to the start of next year, he said much would depend on the situation regarding OPEC producer Iran, which is in dispute with the West over its nuclear enrichment programme.
“If Iran is attacked, then we will be buying oil from pharmacies,” he said, referring to the possibility of a huge price increase.