Ministry of Oil considers granting 40 percent of production to the Eni, Adnoc and Total coalition a violation of Libyan legislation

The Director of the Media Office at the Tripoli based Libyan Ministry of Oil and Gas, Ahmed Al-Tarhouni, told Libya Herald, that talk of the National Oil Corporation’s (NOC) intention to contract with a coalition of Eni / Adnoc /Total and grant them a 40 percent share of production is a legal violation that should be alerted to.Al-Tarhouni was referring to the statement made by the head of the Arabian Gulf Oil Company (AGOCO) to a local media outlet on 11 December.

Disturbs balance of current contracts
The Ministry of Oil and Gas considers granting this quota very high and unprecedented compared to the quotas currently in effect in Libya, confirmed Al-Tarhouni, and said it disturbs the balance of oil contracts in Libya.

NOC requires government approval
Al-Tarhouni pointed out that the Ministry of Oil was certain that this high share came as a result of not following the oil contractual arrangements in force in Libya, as the NOC chose to negotiate with a single source contractor, which is the Eni coalition, which is a procedure that violates the contractual legislation in force in Libya, as it requires obtaining the approval of the Ministry of Oil and Gas and the government for unilateral negotiation before starting it.The Ministry of Oil believes,Al-Tarhouni continued, that the NOC could have obtained a higher share in production if it had offered this field in an open and transparent international bid, and that it would have been the best test of the acceptability of international companies to work in Libya.

Other companies would want similar contract amendments
Al-Tarhouni noted the attention of the Ministry of Oil and Gas to the ‘‘bad, harmful and dangerous effects resulting from this act’’, which it has alerted to on more than one occasion and which may push and drag the rest of the other oil companies to demand amending their contracts and granting them larger and equal shares to what was granted to this consortium, adding that this is what actually happened when Total and ConocoPhillips requested amendments to the contracts concluded with them.