Tarek Eltumi, Founding Partner of Eltumi Partners, spoke to the Middle East Economoic Digest (MEED) about the high levels of interest shown by international companies in Libya’s upcoming oil licensing round.
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October 2024 – “It’s not just big international oil companies or smaller producers,” Tarek said. “We’ve also been contacted by the service companies and the drilling companies.
“It’s across the board – from everywhere in the value chain and the ecosystem.”
Libya’s National Oil Corporation (NOC) plans to launch the licensing round either at the end of October or in early November.
The bid round for exploration and production agreements will be the country’s first in more than 15 years. The round is expected to offer exploration blocks in the Murzuq, Ghadames and Sirte basins.
Tarek believes that global geopolitical developments have heightened interest in Libya’s upcoming licensing round:
“The crisis in Ukraine has increased Western interest in Libyan oil, which will compete against Asian interests and Arab interests. It should be a mix of companies from all over the world, because of how good the product is and how proximate Libya is to international shipping routes to Europe.”
The experiences that oil companies have had in Libya over the past 15 years have made them more familiar with the Libyan laws that govern contracts, and more comfortable operating in the country.
“During the last licensing round, the biggest question that my clients had was about the use of Libyan law to govern contracts,” Tarek says.
Whilst IOCs may have had concerns about the use of Libyan law to govern contracts previously, the law has been tried and tested, and now oil companies have a deep understanding of the processes involved.
Tarek stated, “There’s been so much case law and so many tests and challenges of Libyan law. The companies are very comfortable about it now. There has been an advancement of the understanding and application of Libyan law, so our clients hardly ever ask us that question anymore and it’s not really an issue.”
Tarek also stated that concerns over political stability impact Libya’s oil and gas sector significantly. The NOC has managed to maintain its independence through strong governance as well as international resolutions that have been issued by the UN and sanctions protecting NOC.
“The political situation doesn’t affect the legal situation. Laws still apply across the whole country. We don’t see the political issues as a main driver in the oil and gas sector. One reason for this is that NOC remains independent and insulated from political rifts.”
Formerly a partner at the London offices of Hogan Lovells International LLP and general counsel at the Libyan branch of AECOM Inc., Tarek Eltumi has substantial experience advising international upstream energy companies, commercial banks, multilateral lending agencies, contractors, project sponsors and developers. He has advised various international energy players on EPSA contacts with Libya and continues to be a key point of contact for IOCs regarding their operations in Libya.
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