Occidental Petroleum Corporation has announced that the Libyan authorities have approved, effective July 1, 2005, Occidental's recent agreement with Libya's National Oil Corporation whereby Occidental will resume operations in its historical Libyan contract areas. Occidental was required to leave its oil exploration and production operations in the prolific Sirte Basin in 1986 when the U.S. government barred American companies from doing business in Libya.
During the interim, the producing properties have been operated by a subsidiary of Libya's National Oil Corporation. While Occidental retained its contractual rights during the sanctions era, the company derived no economic benefits from these operations.
The immediate impact of Occidental's resumption of operations in these Libyan properties will be to add net production in the range of 12,000 to 15,000 barrels of oil per day to the company's 2005 exit rate.
In announcing the accord, Dr. Ray R. Irani, Chairman, President and Chief Executive Officer said, "Occidental's return to these properties not only will have an immediate positive impact on the company's current worldwide production, but also holds significant potential for future production growth through new investment in enhanced oil recovery projects. This agreement, which follows our success in winning interests in nine of the 15 exploration blocks awarded in Libya's recent licensing round, is an important component in our growth strategy in one of our core regions. The old contract areas, which include four exploration blocks, plus the nine new exploration blocks, encompass an area of approximately 130,000 square kilometers, making Occidental the largest net working interest holder of oil and gas acreage in the country. Occidental has a long and successful history in Libya, and we believe our return will produce significant benefits for the people of Libya and for our stockholders."