Officials of Algeria’s Sonatrach and Libya’s National Oil Corporation are said to be currently holding talks to relaunch Algeria’s oil exploration on Libyan soil.
The research by the Algerian state-owned company was suspended some years ago due to some unavoidable circumstances, but talks to resume operations have resumed. The information was disclosed during a hearing of the Finance and Budget Committee of the Algerian Parliament by the Minister of Petroleum, Mohamed Arkab.
He told parliamentarians that negotiations on some conditions to be met by Libya before the return of Sonatrach were still underway. One of the conditions he mentioned was the profitability of the exploration, considering the current unattractive oil prices at the moment due to the COVID-19 pandemic.
He said, “Coordination is underway with the Libyan Ministry of Energy so that the company can resume its activities as soon as the appropriate conditions are met, particularly in terms of security.”
Though exploration activities by Sonatrach haven’t been happening in Libya for a while, in January 2018, both countries signed a framework agreement on strengthening the capacities of both parties that partake in the management of the oil and gas reserves lying along the border between Libya and Algeria.
Before the suspension, Sonatrach had already discovered oil and gas in the Ghadames Basin, which is about 650 kilometres southwest of Tripoli.
According to the head of the Libyan National Oil Company, Mustafa Sanallah, Libya needs the return of foreign investors in the oil and gas sector to help manage the falling oil prices and help to revive its economy.
Alongside Nigeria, Libya is a producer of “sweet oil” and is highly attractive in the international market and refineries. The country has the 9th largest oil reserve in the world and the largest in Africa. For the improvement of the economy of Libya, most of its underdeveloped fields need to be developed and more foreign investors are needed in the country.
