OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV) announced today that it has made the first oil discovery in Libya since the revolution started in 2011. This discovery lies in the Murzuq basin and is located 800 km south of the capital city.
Figure 1: Map of Libyan Oil Infrastructure
OMV states that Repsol will proceed with further drilling in the area
The block NC115, where the discovery was made, is operated by Repsol SA (OTCMKTS:REPYY) (MCE:REP) in partnership with OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV) and Total SA (NYSE:TOT). OMV states that Repsol will proceed with further drilling in the area. ‘The drilling campaign started in May 2013 and is expected to last until the end of 2015,’ informed OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV).
The Austrian oil company operates primarily in the Sirte basin in East Libya together with Occidental and Zuetina and has an annual production capacity of 60,000 barrels of oil equivalent per day (boe/d). However, the Murzuq basin is located in the southwest of Libya and this area exports via the Zawiya oil terminal which is located near the federal capital of Tripoli. This area has remained relatively safe from the political revolution and unrest and has continued almost routine activity throughout the revolution period.
“OMV has been present in Libya since 1975 and started production in 1985. In 2012, OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV) produced 29,500 boe/d in Libya,” says OMV. Libya accounts for around 10 percent of OMV’s total group production, said CEO Gerhard Roiss who also stated that OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV) was to remain committed to the country. “In contrast, Exxon said last month it was scaling back in Libya, while Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) abandoned two exploration blocks there last year. Others have been slow to resume exploration since the 2011 war,” reports Reuters.
OMV AG’s official statement released this morning
“This discovery in Libya confirms the potential of the country for OMV’s upstream activities,” said Jaap Huijskes, OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV) Executive Board member responsible for Exploration and Production in OMV AG (OTCMKTS:OMVKY) (ETR:OMV) (FRA:OMV)’s official statement released this morning. Libya is the 9th largest holder of proven crude oil reserves according the U.S. Energy Information Administration (EIA).
According to the Organization of Petroleum Exporting Countries (OPEC), crude oil production from Libya dropped to 407,000 barrels of oil per day in September 2013 as against a capacity of 1.6 million. Production in August stood at 597,000 bblpd and hence saw a dip of 31.8 percent in September 2013 on a MoM basis.