(Bloomberg) -- French oil giant Total SA said last month it had acquired Marathon Oil Corp.’s assets in Libya in a $450 million deal. Not so fast, says the country’s state energy company.
Libya’s National Oil Corp. hasn’t yet approved the transaction and is “discussing arrangements” for the proposed sale with the country’s presidency council, Chairman Mustafa Sanalla said Monday. His assertion suggests the purchase -- which would more than double Total’s production in the North African nation -- won’t necessarily proceed as planned.
“Any transaction of this nature must have the approval of NOC and the Libyan authorities,” Sanalla said in a statement. “Any attempt to conclude the sale prior to this approval would be in breach of the concession’s contractual agreement.”
Total didn’t immediately respond to a request for comment.
The French company, which has a long history of operating in Libya, said March 2 it acquired Marathon Oil’s 16.3 percent stake in the large Waha Concessions. That gives it access to daily production of about 50,000 barrels of oil equivalent -- and 500 million barrels of reserves and resources -- at just a fraction of the price-per-barrel in Total’s Maersk deal last year. That purchase mostly consisted of assets in the North Sea -- an area of lower political risk.
Libya’s NOC owns 59.2 percent of the Waha Concessions, with ConocoPhillips and Hess Corp. also holding stakes.
“To secure NOC approval, the transaction should deliver the best possible outcome for all the Libyan people, taking into account Libya’s security situation, its fiscal position and external investment requirements,” NOC said, adding that it will publish details of the transaction when it’s concluded.
The Waha Concessions’ total production is about 300,000 barrels a day, but an attack on a pipeline on Saturday has reduced output. Total last month said Waha is expected to pump more than 400,000 barrels day by the end of the decade. The oil major produced 31,500 barrels a day at several other Libyan fields last year.
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