libya oil info

7/29/2019 Libya Oil Info

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Investing In LibyaInvesting In Libya

Greater Houston Partnership

Houston, Texas

June 10, 2004

Presented By:Matthew R. Simmons

Greater Houston Partnership

Houston, Texas

June 10, 2004

Presented By:Matthew R. Simmons


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SIMMONS & COMPANY

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Libya Is A Major Energy PlayerLibya Is A Major Energy Player

Founding OPEC member.

By 1970, Libya oil production was

tied with Saudi Arabia at 3.5

million barrels per day.

High percent of current economy

still linked to oil exports.

Natural gas era is just beginning.

For 30 years, Libya was a closed investment shop.

In 2004, Libyas doors re-opened.


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Libyas Economy At Epicenter

Of North Africa

Libyas Economy At Epicenter

Of North Africa

Libyas population is > 5.5 million people.

Other than oil, the rest of its economy issmall.

The economy sits at center of North Africa:

Egypt

Algeria

Tunisia

Morocco

It also sits across Mediterranean from

Southern Europe.


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Libya: The Center Of The Universe?Libya: The Center Of The Universe?


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Libyas exploration era lasted from 1959 to 1970.

The great oilfields found ranked among worldsbest.

Several small independents grew to major size

due to Libyas oil.

Occidental

Conoco

Marathon Amerada Hess

While current production is aging, its average

crude quality is high (35o to 37o).

Libyas Early Energy Days Were GreatLibyas Early Energy Days Were Great


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Energy Investment Into Libya

Should Be Substantial

Energy Investment Into Libya

Should Be Substantial

Upstream E&P will lease 102 individual blocks

(onshore and offshore).

8 will have data rooms open by end of June.

Rehabilitation contracts for all existing fields will also

be awarded.

Natural gas era is just beginning.

Half of current gas is associated gas.

New pipeline to Italy doubles need for gas.

LNG began in 1965. It could revive. Internal gas needs are insatiable.

Downstream/petrochemical/chemical investment

needs are high.


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Libyas Investment Plans Seem SoundLibyas Investment Plans Seem Sound

New investment law passed in 1997:

Easy to read. Seemingly fair.

Very transparent.

New leadership know they need outside help.

Management/training skills.

Western energy technology.

Investment to create sustainable and prosperous economy.

2004 energy investment: Few preconceived terms

We want this to work.

We want to be model of 21st century transparency.


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Libya Is A Large TerritoryLibya Is A Large Territory

LibyaLibya

Texas/

Louisiana

Texas/

Louisiana


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Is This A Great Deal?Is This A Great Deal?

Past 3 decades have found marginal oil. Most explorers were marginal, too!

Could Libya become a Texas orOklahoma?

Would this be good or bad?


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Libyas Drilling Activity Has Been SporadicLibyas Drilling Activity Has Been Sporadic

Average Wells Per Year Drilled

1970 1971-1982 1983-1995 1996-2003

Wells Drilled 250 115 83 102

Current Rig Count: 10

Source: International Petroleum Encyclopedia.


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Libya Rotary Drill Rig CountLibya Rotary Drill Rig Count

0

5

10

15

20

25

30

35

Jan-82

Jan-83

Jan-84

Jan-85

Jan-86

Jan-87

Jan-88

Jan-89

Jan-90

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

NumberOfRigs

Offshore

Land


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The Drill Bit Has Barely Tested LibyaThe Drill Bit Has Barely Tested Libya

Sirte Basin covers 237 square kilometers.

There have been 1,732 exploration wells

drilled (15% were successful).

Five other key basins covered 483 square

kilometers. Total exploration wells are 563.

125 were successful (22%).


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Is Libyas Oil And Gas Glass Half Full?Is Libyas Oil And Gas Glass Half Full?

Oil generates 95% of Libyas hard currency

and 75% of its budget receipts.

1955 - 1968 concessions covered one-third

of land area (137 concessions granted to 42

companies).

Of 392 discoveries 68% have been in Sirte

Basin. 70% of proven reserves were discovered in

first 10 years.


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Is Glass Half Empty?Is Glass Half Empty?

Exploration post-1970 has been disappointing.

Inducement to find new oil was minimal.

Interest in finding gas was zero.

Explorationists in past 20 years were not

household names.

Has all the great oil been found?

Only the drill bit knows!


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Libyas Natural Gas ChallengeLibyas Natural Gas Challenge Past energy focus has been oil-related.

Future focus has to shift to natural gas.

Hopefully, much will be discovered.

Demand is clear: Bcf Per Day Plan B

2003 2010 2015 2015Power Sector 340 776 776 1,738Steel And Cement 170 234 234 234Petrochemicals 180 180 180 180Gas Plant 15 80 80 80

LNG 150 250 250 250Export To Italy -- 900 900 900Flaring 200 100 100 100Operations 550 550 200 200

Total 1,605 3,070 2,720 3,682


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Investment Opportunities Extend

Beyond Oil And Gas

Investment Opportunities Extend

Beyond Oil And Gas

Power generation.

Agricultural resources.

Tourism.

Oil services/petroleum

equipment.

Steel and cement.

Consumer product to Southern Europe/North Africa.

Chemical industry plastics and other

value-added end products.


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Libya: An Investment Hub?Libya: An Investment Hub?

LAGOS


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All Great Investment Challenges

Have Risks

All Great Investment Challenges

Have Risks

Libya is not immune to foreigninvestment risk.

Gadhafi risk (unpredictable) is topof risk list.

Could Trust Me actually work?

Houston should have a big future role in Libya.


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Has Libya Been Fully Explored?Has Libya Been Fully Explored?

137 concessions were grated to 42

companies between 1955 - 1968.

11 active concessions covered one-third of

country.

Over 400 discoveries have occurred.

68% were in Sirte Basin.

Over 80% of proved reserves found in first

decade of exploration.


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