Libya plans an $8 billion upgrade of its oil refineries with foreign investors' help and may launch a bidding round for gas exploration, its top energy official said in remarks published recently.
'They (Libyan refineries) need to be re-equipped at a requisite cost of not less than $8 billion US dollars,' National Oil Corporation (NOC) chairman Shokri Ghanem was quoted as saying by the NOC website.
'We are now about to enter into international participation to upgrade these units and have taken time to study, evaluate and contact international companies.'
The website, reproducing an interview it said Ghanem gave to Libya's Al Jamahiriyah newspaper, quoted the chairman as saying the refineries must be overhauled after years of neglect when the country was under international sanctions.
'These industries could have developed very well, but the unfair sanctions imposed on Libya severely affected the petrochemical industries due to the stoppage of periodical maintenance and of upgrading of the refineries and processing compounds,' he said.
NOC refines close to 380,000 bpd of crude in its refineries. About 60 per cent of the products are exported, with Europe the principal destination, according to the US government Energy Information Administration.
The five domestic refineries, all simple hydro-skimming units, are: Ras Lanuf, capacity 220,000 bpd, Az Zawiya, capacity 120,000 bpd, Tobruk, capacity of 20,000 bpd, Brega, capacity 10,000 bpd and Sarir, a topping facility, capacity 10,000 bpd.
Asked about Libya's future exploration plans, Ghanem replied: 'We haven't decided yet and are still reviewing the suggested areas. Our interest now is going towards gas exploration and we will announce it in due time.'
He added: 'In light of the increasing international interest in natural gas, we are considering arranging a bidding round for investment in gas exploration.'
Libya has held three oil exploration licensing rounds since the end of Western sanctions, awarding permits to Western, European and Asian energy companies keen to secure a foothold in one of the world's last under-explored oil regions.
But there is increasing interest in its underdeveloped gas sector, including its liquefied natural gas potential, following several recent discoveries.
Ghanem said he would soon set out the arrangements for increased energy investment opportunities to Libyan companies, but costly exploration would be left to international companies.
'The oil industry requires huge investment and as a state, we cannot spend immense amounts on exploration risk. We have left this task to international companies,' he said.
'Within the industry, we would like to involve Libyan portfolios in financing development investment as well as in other areas of the oil industry. Policies have been established for this purpose and we are about to set out the details for the inclusion of Libyan portfolios in oil investment.'
He said Libyan authorities would soon raise oil sector salaries to help retain talented staff who might otherwise leave to join foreign companies.
'No doubt the salaries of the oil sector employees are very low compared to similar companies worldwide, which has led to this migration to other companies. This is why we have made some efforts to increase the salaries of oil sector personnel.
'The GPC (General Peoples Congress or parliament) will very soon approve a new financial Resolution, providing for a better salary schedule and encouraging incentives.'
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