Progress on Libya-Tunisia Oil Deal

Libyan Minister of Oil and Gas, Dr. Abdulbari Alarusi [Al Arusi] (pictured), and Tunisian Minister of Industry, Mehdi Juma, have approved plans to supply Tunisia with Libyan crude oil and oil products, reports Libya Herald.

A deal to supply Tunisia with cheap Libyan oil was agreed last May.

They also agreed to set up a joint committee to oversee the project, and another to oversee electricity supplies between the two countries.

The ministers also reviewed the Skhira refinery project, with the Tunisian Minister pushing to speed up the project, and saying that a formal agreement committing Libya to provide his country with oil should be signed.

The $2-billion, 120,000-barrel-a-day Skhira project was first awarded to Qatar Petroleum in 2007, but plans were shelved when changing fuel prices made it uneconomic. However in late 2010, the Qaddafi regime’s prime minister, Al-Baghdadi Al-Mahmoudi announced Libya would take it over and provide Libyan oil as feedstock.

This plan was then derailed by the revolutions in both countries, but last year the Qatari government announced that it was rejoining and reviving the project. However, it said that that costs had escalated and a second partner was needed.

The refinery is to produce petrol and diesel as well as petroleum coke, bitumen and gasoil for domestic consumption as well as exports. It is envisaged that the capacity of the complex will eventually rise to 250,000 b/d and that most of the feedstock will come from Libya.

However, Arusi pointed out that while Libya would continue to support projects already agreed between the two countries, the Libyan oil industry was being restructured and a larger role for the private sector in major projects was now expected.

Last December, Canadian energy company Sonde has announced that it has reached an agreement with the Joint Oil Company, equally owned by Libya and Tunisia, to enter a second phase of exploration under the Exploration and Production Sharing Agreement in the Gulf of Gabes.

(Source: Libya Herald)

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