POGC to Lift Libyan Force Majeure Clause

The Polish Oil and Gas Company (PGNiG) has said it is close to lifting the force majeure clause on its Libyan operations. It issued the following statement this morning:

Libya, a nation with an estimated 47 billion barrels of proven oil reserves has witnessed operations come to a standstill for 18 months due to the Arab Spring. Furthermore, in March 2011 a force majeure notification was sent by POGC to NOC Libya, suspending the Exploration and Production Sharing Agreement (EPSA) but Dr. Jacek Gutowski, Vice President of the Board of Directors from POGC Libya B.V, believes that the force majeure clause is close to being lifted.

POGC Libya B.V is a special purpose company fully owned by Polish Oil and Gas Company (PGNiG S.A) that explores prospective license areas in the Murzuq Sand Sea area located in the Sahara Desert in Libya.

Dr. Gutowski recently participated in an interview with The Energy Exchange discussing POGC Libya B.V’s and PGNiG S.A’s operations in North Africa, specifically focusing on both Libya and Egypt.

There is significant promise being shown in Libya as the oil rich nation is once again pumping out 1.5 million barrels per day (bpd) and with security issues relatively subsiding, PGNiG SA is focused on resuming operations in Libya.

Dr. Gutowski said:

We are currently close to lifting the force majeure clause. This depends on the security situation in our license area in the Murzuq basin. We are looking forward to completion of the training of Oil Installation Guards personnel in the area which will protect our operations due to agreement signed between the OIG and POGC.

Boasting the largest oil reserve in Libya, and the tenth largest globally, 25 per cent of Libyan oil production comes from the fields in the Murzuq basin.

PGNiG SA takes developing local content programmes in North Africa seriously as it plays a significant role in evolving the oil industry and helps to reduce threats to security in the region.

“We are obliged to respect local content regulations both in Egypt and Libya according to the contractual obligations’” said Dr. Gutowski. “75 per cent and 90 per cent of the employed staff in Libya and Egypt respectively are local citizens. They range from junior staff up to managers of the local branches of our company. All of them have an opportunity to participate in extended professional training, both theoretical and practical, provided by our company mainly in Poland.”

Dr. Gutowski further stated that the key driver needed to be in place to develop non-conventional resources further in North Africa is the economy.

If the economic analysis of the potential project gives a good result, the potential project will be developed at some point in the future, but it will depend on the political stability of the particular countries and the whole region.

In reference to North Africa, Dr. Gutowski said: “As the urbanisation of the area is low and there are no environmental obstacles, it is easier to develop unconventional resources there, than for example in Europe.”

On being asked if PGNiG SA will be taking part in new licensing rounds within the region, Dr. Gutowski replied: “All the licensing rounds in the region are carefully analysed by the new ventures team in Warsaw. The company will participate in any licensing round if the evaluation gives an encouraging result.”

PGNiG SA is the largest Polish oil and gas exploration and production company, is one of the sponsors of the North African Oil and Gas Summit. It is a leader in natural gas segments in Poland that are trade, distribution, oil and gas exploration and production, as well as gas storage and processing.

Promoting a collective vision of North Africa, the seventh annual North Africa Oil and Gas Summit will be held from 6 – 8 November 2012 in Vienna, Austria and will gather together NOCs, governmental representatives and major international investors to address key challenges that include political stability, contractual and physical security, the need for technology and innovation to develop unconventional resources and more.

No comments yet.

Leave a Reply