Libyan oil needs $30 billion to reach 3 mbd
Raising Libya’s oil production to 3 million barrels per day by 2015 will cost about $30 billion, the head of France’s trade commission UbiFrance said Monday, after travelling with French firms to Tripoli to meet interim government officials.
About 80 French companies, including the likes of oil giant Total, cement maker Lafarge and engineering group Alstom, met Libyan ministers, officials and company executives during the one-day trip to the Libyan capital Oct. 12 to position themselves for future contracts.
UbiFrance’s Director General Christophe Lecourtier, who has a team working to facilitate deals in the war-torn country, said the fall of Moammar Gadhafi had provided Paris with opportunities in sectors where it previously had no involvement in the OPEC state, such as tourism and agriculture. “We estimate that today there are $30 billion worth of investments in hydrocarbons needed between 2011-2015 to take Libyan oil production to 3 million barrels a day,” Lecourtier told Reuters in an interview.
French President Nicolas Sarkozy spearheaded military intervention in Libya and France’s top firms will now be eager to capitalize on the positive sentiment towards Paris among Libya’s new leaders.
Libya is struggling to resume oil production, which forms the overwhelming bulk of its exports but was largely halted for the past eight months by its civil war. The country produced about 1.8 million bpd during peace time and hopes to be pumping 1 million barrels per day within a year.
Total, which has resumed operations in Libya, had production of 55,000 barrels a day in Libya prior to the six-month war that overthrew Gadhafi and is set to be among the companies most likely to benefit from a resumption of business in the oil-rich country.
Lecourtier said that unlike the previous administration’s “gigantic bazaar,” the interim government had a good mix of people with international expertise that would help ease the business process. However, he cautioned against expecting too much in 2012 as Libya’s new leadership takes shape. “It would be odd to expect Libya in the space of a few months to become as [transparent] as Switzerland,” he said.
Lecourtier said there would also be a need for about $12 billion of investment in developing the electricity sector, more than $4 billion in general reconstruction as well as longer term opportunities in the transport sector of about $5-6 billion. UbiFrance has three people in Libya with a back-up team in Tunisia working directly on building contacts and paving the way for future contracts. It will officially open an office in Libya January.
During Gadhafi’s time in power, when just under 50 French firms were operating in the north African state, France was its sixth-largest supplier, behind the likes of Italy, Germany, China and Turkey.