Page 5 - AfrOil Week 39 2019

AfrOil COMMENTARY AfrOil
 Taking sides”
NOC went further in its statement, saying that LNA was trying to portray it as “taking sides” in the conflicts between Tripoli and breakaway forces.
“Aviation fuel supplies to the eastern and central regions in the first three months of 2019 were 21% higher relative to 2018 and 52% higher from April to August,” it said. “In August, avia- tion fuel supplies were reduced because of the availability of sufficient and adequate reserves at the [regional] warehouses, which reached their full storage capacity.”
So far, Haftar and his allies have found little overt sympathy in the diplomatic community. On September 22, seven countries – France, Germany, Italy, Turkey, the United Arab Emir- ates, the UK and the US – issued a joint state- ment proclaiming their recognition of NOC as Libya’s only lawful and rightful oil operator.
“We fully support Libya’s National Oil Cor- poration (NOC) as the country’s sole independ- ent, legitimate and non-partisan oil company,” the statement said. “Now is the time to consoli- date national economic institutions rather than break them apart. For the sake of Libya’s political and economic stability and the well-being of all its citizens, we exclusively support NOC and its crucial role on behalf of all Libyans.”
The statement brought together several countries that have sometimes found them- selves on opposite sides of discussions on Libya’s fate. Turkey, for example usually expresses sup- port for the internationally recognised regime in Tripoli, while Egypt and the UAE have often backed Haftar.
The German connection
Meanwhile, Germany’s government has its own reasons for paying close attention to Libya. They stem from the fact that Wintershall DEA, a sub- sidiary of the German conglomerate BASF, is stil active in the North African country.
Wintershall has been extracting oil in Libya since 1958, and it is currently producing around 45,800 barrels per day (bpd) of oil from Al-Jurf, a field in the offshore zone near the Tunisian border. It has expressed interest in expanding its Libyan operations to include onshore produc- tion at the As-Sarah field, which lies in the east.
But the business daily Handelsblatt reported last week that the company might exit Libya instead, owing to its failure to come to terms with NOC in talks over onshore exploration and development operations. The dispute has led the BASF subsidiary to demand that the German government provide state guarantees, along with other forms of legal and financial support, for its Libyan investment projects.
As of last week, German authorities had not said publicly whether they were willing to enter- tain the oil operator’s claim. But representatives of BASF and Wintershall were due to meet with Deputy Economy Minister Ulrich Nussbaum on September 25 to discuss the question of whether to continue doing business in Libya.
As of press time, it was not clear whether the meeting had taken place as scheduled. Winter- shall, meanwhile, has remained mostly silent about its plans. When contacted by Offshore Energy Today, the BASF subsidiary said only that it had been in talks with NOC since 2017 concerning its onshore activities. ™
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INVESTMENT
Total comments on Nigeria LNG’s Train 7 expansion project
Seven
have issued a
countries
joint statement proclaiming their recognition of NOC as Libya’s only lawful and rightful oil operator
NIGERIA
ARNAUD Breuillac, Total’s president of explo- ration and production, said last week that his company expected to make a final investment decision (FID) on the Train 7 project by the end of this year. This will allow the Nigeria LNG consortium to bring the new production train on stream in 2023, he said in New York during Total’s Investor Day.
He did not say exactly when the FID would be made. Nigeria LNG has said previously that the deadline would fall on October 31, 2019.
He also highlighted the importance of the expansion scheme, noting that the construc- tion of a seventh production train at the Bonny Island gas liquefaction plant would raise output from its current level of 22mn tonnes per year. According to previous reports, Train 7 will be able to turn out 8mn tpy of LNG.
The project will help Total achieve its goal of raising LNG’s share of its total production to
22% by 2025, Breuillac said. LNG accounted for 14% of the company’s output in 2018, he noted. Total is one of four shareholders in Nigeria
LNG, along with Nigeria National Petroleum Corp. (NNPC), Royal Dutch Shell (UK-Neth- erlands) and Eni (Italy). NNPC, with 49%, is the largest single stakeholder in the group.
Last month, the group named SCD – a con- sortium formed by Saipem (Italy), Daewoo Engineering & Construction Co. (South Korea) and Chiyoda (Japan) – as its contractor for engi- neering, procurement and construction (EPC) work on Train 7. Once the FID milestone is reached, SCD will be able to start work and wrap up construction of the new production train in four to five years.
Tony Attah, the CEO of Nigeria LNG, said recently that the consortium intended to finance the $10bn expansion project through a combi- nation of debt and equity.
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