Libya's oil riches await.

With the lifting of sanctions the major oil companies are lining up to do business in Libya. Here is an exclusive interview with the most sought-after man in Libya today: Mr. Abdullah el-Badri and his insights into the future of the oil business in Libya.

Q. The Ministry of Energy was

Mr. El-Badri: In broad terms, NOC as a holding company is entrusted with the realization of the country's policies and objectives for the development of oil and gas resources. In particular, NOC is responsible for the implementation and the follow-up of the exploration, development, production, and marketing operations of hydrocarbons inside and outside the country, through wholly owned affiliated companies or in association with other partners and through any type of investment The function of the Secretariat of the General People's Committee for Energy is the overall supervision of the oil and gas industry and in particular, the Secretariat is responsible for the drawing up of programmes for the implementation of the State policies and plans in the Energy sector, as decided by the General People's Congresses and the General People's Committee.

Q. Libya is being promoted as the last major oil-producing nation that offers the potential for large discoveries. It has been mentioned that only 25% of the country has been fully explored, would you agree with this figure?

Mr. El-Badri: I would agree with this figure and Libya is definitely under-explored. The Khufra Basin is a huge basin and also the region of Eastern Libya, which covers a vast area has not been developed at all. In addition, offshore has also not been really explored. The only areas that have been explored in detail are the Sirte Basin and the Sabratha Basin and even if we look at the areas that have already been explored there is still potential. First of all, there is now new technology available. Secondly, companies in the past were looking for big discoveries with wells that could produce 5000 or more barrels per day and now the criteria is 500 or even less.

Q. There has been talk of raising output to 2 million barrels a day by 2010 and 3 million barrels by 2015; do you feel these are viable goals?

Mr. El-Badri: Right now we can produce 1.7 to 1.8 million barrels a day. However, as we speak we are developing new fields. I believe that by 2007/2008 we could raise output to 2 million barrels a day without problems. To obtain 3 million barrels a day we would definitely need new discoveries and increased investment within the oil sector.

Q. There will be a number of blocks on offer as NOC embarks upon the first round of public bidding, what are the advantages of this method and how many blocks will be open to bidding?

Mr. El-Badri: Now there will be 15 blocks for auction. Initially it was 8, then 10 and now for sure it will be 15 blocks offered for auction. The public advantage of bidding is definitely transparency. Before a company can enter the bidding process, they must reach specific criteria ensuring that we get the right investor. This is a very important issue that we have taken into consideration. We are hoping to put it out to the market soon, but on major issues such as these we want to be sure that everything is exactly right. The bidding process will be open for 4 months, we are considering shortening it, but companies want to discuss further and we are trying to accommodate everyone.

Q. The licences will be guaranteed under the new EPSA IV agreements; what are the advantages of this new licence?

Mr. El-Badri: There were difficulties within the old EPSA's and we did receive complaints from several companies. We took all these points into consideration and incorporated these into EPSA IV. We are now listening to all companies, both those that are already operating in Libya and potential investors. In the past, we did not receive concrete complaints, but now we are taking what they say seriously into consideration and collaborating closely. We have major companies wishing to invest in Libya and are bringing with them modern technology, so they must have a say in the operations.

Q. Gas is set to become a central foundation of Libya's future energy needs. How important is that sub-sector in the overall aims of Libya "s policy?

Mr. El-Badri: The pipeline between Libya and Sicily is now finished and we hope that by the end of September the first onshore gas will be transported. The offshore gas will be ready to go by 2005. We also have some small discoveries along the 500km length of the pipeline that we may develop in the future and connect to the pipeline. One issue we are currently looking at is the gas deposits on the Eastern side of Libya that cannot be transported by the pipeline. We are now talking with American and European countries about the possibility of building an LNG plant. We now plan to convert the entire domestic market to gas, particularly power generation as it is very easy to build, maintain and it is clean for the environment.

Q. With potential investors already arriving on the shores of Libya in your opinion, what are the comparative advantages of doing business in Libya?

Mr. El-Badri: Through the history of NOC and through the history of our Government we have always fulfilled our obligations. All our partners are very happy working with NOC as we understand their needs and they understand ours. Other advantages are that geographically we are very close to the Mediterranean market and Europe is very easy to supply. We understand the global oil industry and follow it closely, in that regard we want to integrate and accommodate ourselves into it, plus there is the excellent quality of our oil that plays and important role.