Western oil companies are looking to Libya for oil supplies, but tough oil laws are making investors hesitant to cough up the billions needed to increase the oil production.
Before the fights in Libya erupted, the country produced about 1.6 million barrels of oil per day, of which the Libyan National Oil Company controlled 1.1 million, according to CNN Money.
Since the death of Moammar Gadhafi oil production is on the rise again, but the laws are not going anywhere for the time being. However, some changes in the laws are expected to come eventually.
A debate is taking place within the National Oil Company over how much access should be given to the international oil firms, said Ross Cassidy, a Libyan oil analyst at the energy research firm Wood Mackenzie . Cassidy says companies can expect to be granted access to existing oil fields and the ability to further explore.
“Libya’s oil output has risen to 500,000 barrels per day (bpd) boosted by fresh flows from Spain’s El Sharara field,” the interim oil and finance minister announced Tuesday, according to Reuters.
BP (NYSE: BP) is one company looking to get back in with Libya. On Tuesday, BP announced that it has no oil and gas production in Libya, but in February was preparing to begin exploration in western Libya. Exploration was previously suspended because of all the turmoil going on throughout North Africa.
“We are absolutely planning to go back in and all the signals are that people want us to and expect us to come back,” BP’s Chief Executive Bob Dudley said to Reuters Africa. “It’s just a matter of time and we’ll begin an exploration program.”
Before the conflicts associated with Gadhafi came into play, Libya was Africa’s third-largest oil producer. Conflicts led to the shutting down of supplies. Libyan oil companies, such as Eni and Total, have resumed some oil production.
That’s all for now,