Petrobras Plans to Expand its Operations in libya

Petrobras Plans to Expand its Operations in Libya

10-08-2007

Brazilian oil company Petrobras and the National Oil Company (NOC) of Libya, which belongs to the Libyan government, are negotiating cooperation. According to the ambassador of Brazil to Tripoli, Luciano Osório Roza, there are possibilities for Petrobras to train professionals from the Libyan company in Brazil in areas like geology and geophysics. Both companies have been improving their relations due to efforts made by both governments and also since Petrobras started operating in Libya, in 2005. At the time, the company won a tender for exploration of oil in Libya.

Petrobras has an office that occupies a whole floor in the largest business building in Tripoli and is executing seismic studies in search of the commodity, in offshore areas. Next year, according to ambassador Osório, drilling should begin. The Brazilian oil company plans to expand its operations in the country. The organisation is participating in a tender for exploration of gas reserves in Libya. As informed by ANBA, in early September, Petrobras has already been pre-approved, together with a group of 35 foreign companies, to bid for the project. The result will come out in December.

The president of Brazil, Luiz Inácio Lula da Silva, sent a letter to the Libyan Leader, Muammar Qadhafi, asking for both countries to improve their cooperation in several areas, among them oil. The letter was delivered by the special spokesperson for the Presidency of the Republic of Brazil, Marco Aurélio Garcia, who visited Libya. According to the ambassador of Brazil to Tripoli, Lula asked for an extension of cooperation between the oil companies of both nations. This information was confirmed by a spokesperson for Garcia.

"There is a positive element in the relations between Brazil and Libya that is the good understanding between president Lula and Qadhafi. Lula was the first Brazilian head of state to visit Libya," stated the Brazilian ambassador to Tripoli. He recalls that after the visit of the president of Brazil, several other leaders, from Great Britain, France and Spain, also visited Libya. Osório stated that Petrobras and NOC have sectors in which they could establish partnerships. One of the possibilities, according to him, is the secondary recovery of wells.

The diplomat explains that due to being closed to foreigners during the 1980s and 1990s, when the United States applied sanctions on countries negotiating with Libya, the country did not have access to new technologies for oil exploration. Therefore, in some fields that have already been explored, there is still approximately 40% of their original oil. Petrobras, according to Osório, has developed technology to recover this oil. The Brazilian company also has experience in extracting oil from fields in which drilling is hard due to their geological structure. These fields also exist in Libya.

The current contract Petrobras has in Libya makes it possible for the company to explore oil in an area of 10,307 square kilometres in the Mediterranean. The area includes four blocks, in seas ranging from 200 to 700 metres depth. The contract is valid for five years, but may be renewed for another 20 years. Libya has proven oil reserves of 42 billion barrels of oil.