French energy company Total swoops in to take on assets in Libya after Marathon Oil announces a country exit. File photo by Mike Theiler/UPI. |
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March 2 (UPI) -- French energy company Total said Friday it spent $450 million to take on Marathon's holdings in Libya after the latter company announced its divestment.
The French company said it moved in on the opportunity after its U.S. counterpart Marathon Oil divested from Libya by acquiring its assets. Marathon's subsidiary in Libya held a 16.3 percent stake in the Waha concession and the acquisition gives Total access to more than 500 million barrels of oil equivalent reserves.
"This acquisition is in line with Total's strategy to reinforce its portfolio with high quality and low technical cost assets whilst bolstering our historic strength in the Middle East and North Africa region," Patrick Pouyanné, Total's chairman and CEO, said in a statement.
The Waha concession, located in Libya's prolific Sirte basin, is producing around 300,000 barrels of oil equivalent per day and could increase to 400,000 boe per day by the end of the decade.
Libyan oil production had faltered in the years since the downfall of the regime of Moammar Gadhafi in 2011, nearly grinding to a halt as a result of simmering civil conflict. Economists at the Organization of Petroleum Exporting Countries, of which Libya is a member, reported production last year averaged 817,000 barrels per day, far less than its pre-Gadhafi levels of around 1.5 million bpd.
Market fundamentals and data reporting group Genscape said its monitoring found Libya produced about 1.08 million bpd in January, the country's highest level since July 2013.
Libya is still struggling with national security issues, which earned it an exemption last year from OPEC's effort to balance an oversupplied market with coordinated production cuts.
Marathon's divestment marks its full exit from Libya.
"Today's announcement to divest Libya at an attractive valuation continues the simplification and concentration of our portfolio to the high margin, high return U.S. resource plays," Lee Tillman, Marathon Oil's president and CEO, said in a statement.
The United States is setting records in terms of oil production and could be on pace to become the largest producer in the world within the next few years.
