Libya’s state energy company approved French oil giant Total SA’s acquisition of Marathon Oil Corp’s assets in the North African country in a deal that could boost the Opec nation’s production capacity.
Total is buying Marathon Oil’s minority stake in the Waha concessions for $450mn, according to a statement by Libya’s National Oil Corp. The Paris-based producer has committed to invest an additional $650mn in Waha and boost capacity by 180,000 barrels a day, NOC said.
“After successful negotiations with Total, I am pleased to report that NOC approves this deal,” the state company’s chairman, Mustafa Sanalla, said in the statement.
Total chief executive officer Patrick Pouyanne said in a statement the company would “engage resolutely with NOC and Waha Oil Company in order to invest, optimize the infrastructure and develop new reserves for the benefit of all parties.”
Libya has Africa’s largest proven oil reserves and relies on crude for most of its revenue, but it has been convulsed by violence since the 2011 overthrow of dictator Muammar Gaddafi. The conflict has caused repeated outages in oil supply. Output from the El-Feel oil field in southwestern Libya halted earlier this month in what Sanalla then called a “criminal” act.
The French giant, which has a long history of operating in Libya, said in March last year it had acquired Marathon Oil’s 16.3% stake in the large Waha Concessions but the NOC has since then said the deal was still pending approval.
The NOC has 59.18% of the Waha concessions, with Total and ConocoPhillips each holding 16.33% and Hess Corp the remaining stake. The Waha concessions currently pump about 300,000 barrels a day.
Libya is exempt from the output cuts that the Organization of Petroleum Exporting Countries and its allies agreed last week to extend until the end of March. The country currently produces 1.1mn barrels a day and plans to ramp up output to 1.5mn barrels by the end of 2020, Sanalla said last week.
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