EPSA III refers to the third version of the contractual framework used by Libya's National Oil Corporation (NOC), introduced in 1988 to succeed the preceding EPSA II system and used through the 1990s, to determine new Exploration and Production Sharing Agreements with international oil companies (IOCs) operating in the country.
With the aim of encouraging investment, improved terms were offered under the EPSA III framework and between 1988-2011 Libya awarded 47 blocks under EPSA III.
The terms of the EPSA II were amended for the EPSA III in order to entice investors. Dirk Vandewalle, author of various publications on Libya, considers that the strategy partly paid off, as by the end of 1995 there were two dozen foreign oil companies operating once again in Libya. However he highlights that many of these companies were newcomers and had neither the experience nor the capital required for large-scale exploration investments. Therefore, the EPSA III framework suffered as Libya's NOC was forced to diversify its partners for exploration and production due to the country's confrontation with the West.
The EPSA III framework featured significantly higher production shares for IOCs, compared to the later EPSA IV framework introduced, which entailed higher Libyan government shares. Drilling activity over the period of the EPSA III framework stagnated, with US sanctions from 1986 restricting the involvement of international companies, and stiffening contract terms. The number of active wells over the period fluctuated between roughly 40-50, having peaked at over 250 in the late 1960s.
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- "Libya - local content in law" Menas Local Content Online, retrieved 18 October 2011
- Vandewalle, Dirk J.“A History of Modern Libya”, Cambridge University Press, 2006.
- "German Oil Firm RWE Makes Two More Discoveries In Libya" WikiLeaks, 22 September 2008
- "Libya Upstream:Past Performance and Future Potential" PFC Energy, 30 November 2004