Wintershall Operations in Libya

=History=

Wintershall began its exploration and production presence in Libya in 1958. As of 2011, they had invested more than $2 billion and drilled over 150 wells to become one of the largest oil producers in the country. As of May 2012 Wintershall was the second largest international oil company (IOC) in Libya, accounting for nearly 6 percent of all output.

Wintershall reported in February of 2011 that they were temporarily suspending their operations and evacuating their 130 international personnel in the face of escalating political unrest. But the company restarted production later in 2011, where facilities were undamaged, according to the company's website. By 2012 the company managed to restore and stabilise production at 80 percent of pre-revolution levels.

In May 2012 Wintershall issued a warning that the current terms offered in the Libyan oil and gas sector by the new government, considered by some experts as the toughest in the industry, could impact on decisions regarding future investment in Libya.

=Activities and Contracts=

Prior to the 2011 revolution, Wintershall was producing around 100,000 barrels of oil per day (bpd) in Libya, at eight onshore oil fields in concessions 96 and 97 in the Libyan desert, about 1000 kilometres south-east of Tripoli.The largest deposit where Wintershall produces is the onshore oil field Sarah near the Jakhira oasis. A facility has also been set up there for treating the associated gas from oil production so that the gas and condensate can be transported to the coast for sale. In addition, in 2006 they were awarded the license for another exploration area covering more than 11,000 square kilometers in the south-east of Libya.

At the offshore Al Jurf field, Wintershall holds a 6.7 percent interest in the consortium operating the facilities. The Libyan National Oil Corporation (NOC) holds 73 percent of the venture and French Total another 20.25 percent. The FPSO at the site has a storage capacity of more than 900,000 barrels.

In 2008 the NOC renegotiated the terms of its production sharing agreements (PSAs) with the consortium operating the Al Jurf field, including Wintershall, which forced the international companies to accept smaller production shares. The new terms included a US $500 million signing bonus payable to the NOC. The contract was extended until 2032. According to a leaked US diplomatic cable from February 2010, the Chairman of the NOC Shukri Ghanem believed that Wintershall planned to leave Libya in 2016 when its current concession agreement ends.

Wintershall claims to be one of few firms that no longer flares the gas associated with crude oil production in Libya. Instead, the entire gas is collected via central processing plants and sent to power stations for electricity generation.

=References=