Total Boosts Presence in Libya’s Upstream Sector

France’s oil major Total is boosting its upstream Libyan operations by acquiring the 16.33% stake of the Waha oil concessions held by US Marathon Oil Corporation for $450 million in cash.

The acquisition will give Total access to reserves and resources of more than 500 million barrels of oil equivalent, with the immediate production of around 50,000 barrels of oil equivalent per day and a significant exploration potential in the prolific Sirte Basin, the French company said on Friday, Oil Price reported.

“This acquisition is in line with Total’s strategy to reinforce its portfolio with high quality and low-technical cost assets while bolstering our historic strength in the Middle East and North Africa region,” Total’s Chairman and CEO Patrick Pouyanné said.

The Waha Concessions currently produce around 300,000 boe/d, while production is expected to exceed 400,000 boe/d by the end of the decade, thanks to the ongoing restart of the existing installations and the resumption of development drilling, Total said. Libya’s National Oil Corporation is the majority holder of the Waha Concessions with a 59.18% interest, while ConocoPhillips with 16.33 % and Hess with 8.16% are the other companies invested in the Waha assets, alongside Total’s 16.33% stake.

Total, which has been present in Libya since 1954, reported production of 31,500 boe/d in 2017 from its interests in the country, which include minority stakes in the offshore Al Jurf field and in the onshore El Sharara area.

For Marathon Oil Corporation, the divestiture represents a complete country 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 US resource plays,” Lee Tillman, Marathon Oil president and CEO, said in a statement.

Despite lingering security concerns, Libya managed to significantly boost its crude oil exports in February by 22% over January, to 1.19 million bpd, according to Bloomberg tanker tracking data, which was the highest export level since at least July 2014, when Bloomberg started tracking cargoes.

While last month’s surge in Libyan production and exports may soon start to give OPEC a renewed headache—because the previously exempt Libya and Nigeria now have a collective cap of 2.8 million bpd—analysts still think that Libyan production will remain unstable as the risk of labor disputes and terminals blockades has not gone away.