Libya denies knowledge of Heritage Oil acquisition of Benghazi services company

Murky: Libya's NOC chairman has warned Heritage Oil that that any accord for the transfer of licenses to Heritage would be "null and void" as such a move first requires NOC approval

Πηγή: Malta Today

By KARL STAGNO-NAVARRA

Oct 4 2011

The head of Libya's National Oil Company has denounced UK oil firm Heritage Oil over its announcement this morning that it had ‘acquired’ 51% in a Benghazi-based oil services firm.

NOC chairman Nuri Berruien said that he “has not” been approached by Heritage Oil over the acquisition of the controlling interest on Sahara Oil Services (SOSH) which holds long term permits and licenses to provide oil field services in Libya, for US$19.5 million in cash.

Speaking to Dow Jones Newswires, Nuri Berruien said that any accord for the transfer of licenses to Heritage would be "null and void" as such a move first requires NOC approval.

It wasn't clear if Berruien was exclusively referring to licenses to explore and produce oil and gas, or for all licenses to operate in Libya.

A Heritage spokesman stressed that the deal with Sahara was for the provision of oil field services, not exploration and production licenses, which he said Heritage would still have to bid for.

Earlier today Heritage Oil– which holds a joint production agreement with the Maltese government since 2007 - said that today’s acquisition "will help to speed up its drilling programme in Malta."

“Heritage plans to use SOS to assist with the drilling of its targets offshore Malta and is actively looking to contract a rig to bring forward the drilling of Area 7," the spokesman said.

Heritage established a base in Benghazi this year and has been dealing with senior members of the National Transitional Council, the company said.

It is unclear however, what has changed since the revolution, since Heritage Oil’s operations offshore Malta were threatened by Col. Gaddafithrough a formal request to ‘cease and desist’.

In a letter sent to Heritage Oil in 2008, Gaddafi’s former oil minister ShokriGhanem had warned the company that Area 7 was in Libya’s territory.

Heritage Oil have so far not said what has changed since, and whether the NTC was now renouncing sovreignity over Area 7.

Last month, MaltaToday reported that Heritage Oil was ‘scouting’ Libya amid the revolution that ousted Col. Gaddafi’s 42 year rule, and was seeking lucrative security contracts. However, the spokesman denied the report.

Richard Griffith, analyst at Evolution Securities, said the move "could prove to be a very shrewd investment" by the company.

Heritage Oil shares, however, were down 2.9 percent at 217.8 pence in early trading on the London Stock Exchange.

The company's CEO Tony Buckingham said they are "well placed to play a significant role in the future oil and gas industry in Libya."

"This acquisition is consistent with Heritage's first mover strategy of entering regions with vast hydrocarbon wealth where we have a strategic advantage," Buckingham said.

Besides Malta, Heritage has exploration projects in the Kurdistan Region of Iraq, the Democratic Republic of Congo, Pakistan, Tanzania and Mali, and a producing property in Russia.

'Heritage Oil' strikes deal to gain access to oilfields in strife-torn Libya

Conflict: Rebels continue to fight loyalist forces on two fronts and former leader Muammar Gaddafi remains missing

Πηγή: This is Money
Oct 4 2011


Heritage Oil has struck a deal that will give it access to Libya's oil fields.

The Jersey-based firm paid $19.5million (£12.6million) for a 51 per cent controlling stake in Benghazi-based Sahara Oil Services, which runs onshore and offshore fields.

Libya is still in a state of revolutionary upheaval, as the victorious rebels continue to fight loyalist forces on two fronts and former leader Muammar Gaddafi remains missing.

However, the National Transitional Council - the interim government in Libya - has promised to hold elections eight months after the end of fighting.

Heritage's deal would give it legitimate access to the rehabilitation of formerly state-run fields.

In the past five months the firm has established a base in Benghazi, which has been a rebel stronghold since the conflict broke out, and it has been in discussions with members of the NTC.

But a report suggested there was some confusion over whether the transfer of licences, which is overseen by the NTC, has been completed.

Chief executive Tony Buckingham said Heritage was 'well placed to play a significant role in the future oil and gas industry in Libya'.

'This acquisition is consistent with Heritage's first mover strategy of entering regions with vast hydrocarbon wealth where we have a strategic advantage.'

Heritage, which operates in Iraq, the Democratic Republic of the Congo, Pakistan, Mali, Tanzania, Malta, Pakistan and Russia, said the stake was bought through wholly-owned subsidiary Heritage Energy International.

The group, which reported a $9.6million (£6.2 million) pre-tax loss in the six months to June 30, compared with a $12.3million (£7.9 million) loss the previous year, said it would use the Sahara Oil acquisition as a starting point to access other opportunities in Libya.

Its shares were down 3.4p at 220.9p in late morning trading.

View from the City

Nick Copeman of broker Oriel Securities said: 'On the face of it, this looks like the company is paying a modest price for an option to get a foothold with local expertise in what could be a lucrative area for new entrants given field redevelopment projects and new licence opportunities.

'However at this stage, the shape of the Libyan oil industry going forward including licensing and treatment of incumbent operators remains unclear.'

Richard Griffith, analyst at Evolution Securities, said the move could 'prove to be a very shrewd investment'.