BP to Start Drilling in Libya in 2010

Written by Adam Gonn

The British oil company BP hopes to start drilling for oil in Libya in 2010.

BP is currently in the final stages of finalizing its preparations for drilling on its site on the coast of Libya.

The British oil and gas company BP is in the final stages of its seismic underground investigations in the huge Sirte basin west of the city of Bengazi in north Libya.

"We are coming to the end of the offshore seismic work, and then there is more ongoing seismic work on shore," Robert Wine, a spokesperson for BP, told The Media Line.

"We will then analyze the seismic [result] and work out the prospects for the first well to be drilled, that will be sometime next year," Wine said.

"The agreement we signed back in 2007 was an exploration commitment of $900 million, although we said at the time that it would probably be slightly more around $1.2 billion," he said.

While oil drilling can have some unforeseeable factors, Wine expressed hope that the endeavor would be profitable for the company.

"With the best seismic readings in the world, you never know until you drill a well and see what’s actually down there. If the acreages we get is as good as we hope then in the long term we could be looking at an investment of about $20bn over a couple of decades," Wine said.

When the deal was signed, BP’s group chief executive Tony Hayward described it as "BP's single biggest exploration commitment" and it marked a return of the company to the country after a 30-year absence.

BP in addition committed to spend $50 million on education and training projects for Libyan professionals during the exploration and appraisal period and upon success a further $50 million from commencement of production.

While there are some 40 other oil and gas companies active in the Libya at the moment, including Italian Eni SpA and American giant Exxon Mobil Corporation, the BP deal is considered by some to be the most controversial.

In August 2009, the Scottish government released the terminally ill Abdelbaset Ali Mohmed Al-Megrahi, a former Libyan intelligence officer who was serving a life sentence for his involvement in the Pan Am flight 103 bombing, over Scotland’s Lockerbie in 1988 that killed 271 people.

The decision to release Al-Megrahi on compassionate grounds was based on a diagnosis of terminal prostate cancer in which he’d been given less than 3 months to live.

Following the release, British Justice Secretary Jack Straw told his Scottish counterpart that the decision to release Al-Megrahi was made in order to facilitate "wider negotiations" and the "overwhelming interests of the United Kingdom", according to the London based newspaper The Sunday Times.

Of the victims, 190 were American and the U.S. State Department tried to convince the Scottish government not to release Al-Megrahi.