Russian oil companies win bid for Libyan oil contracts

[tolibya]

TRIPOLI, Libya: Russian companies beat the competition Wednesday in Tripoli when 23 firms — including three from the United States — announced their bids to drill for oil beneath Libya's desert sands and azure Mediterranean waters.

The U.S. firms — Occidental Petroleum Corp., Chevron Corp. and Exxon Mobil Corp. — were outbid in this third international tender for exploration and product-sharing agreements since the U.S. lifted its embargo on Libya in 2004, allowing American companies to do business in this North African country.

Russia's Tatneft scooped up three of the 14 contracts offered by Libya's state-owned National Oil Corporation in the bidding Wednesday and Gazprom, also from Russia, took one. The Chinese Petroleum Corp., Canada's PetroCanada and Germany's Wintershall each landed a contract. The single bidders for three others will be informed in a week whether their offers are approved. Four contracts failed to receive bids.

In January 2005, Occidental and Chevron led the pack, snapping up 11 of the 15 contracts in Libya's first open competition for oil contracts.

Shokri Ghanem, chairman of Libya's oil company, told journalists Wednesday after the bidding that the contracts netted Libya U$58 million (euro44 million) in signing bonuses.

Some 90,000 square kilometers (56,000 square miles) of territory were on offer for exploration under the 14 contracts put to tender, said Ghanem, a former prime minister and Libyan representative to the Organization of Petroleum Exporting Countries.

The development of Libya's oil industry had declined after the United Nations and the US imposed sanctions on the country following the 1988 bombing of a Pan Am jetliner over Lockerbie, Scotland that killed 270 people, even though several non-U.S. companies were active in the sector during the embargo.

"Through foreign investment we aim to improve and upgrade the performance" of the Libyan oil industry, Ghanem said. For that reason, Libya has changed its bidding process to give weight to expanding infrastructure including pipelines and drilling. Previously, assessing bids was limited to the share the foreign company offered the Libyan side.

During the first quarter of 2007, Libya intends to offer for international tender contracts for gas exploration and product sharing, Ghanem said. Talks are under way with foreign companies to expand and upgrade Libya's refining capacity and petrochemical industry, he said.

Companies in Wednesday's bid came from 15 different countries.