U.S. firm Marathon Oil will continue operating in Libya after giving up plans to sell its stake in Waha Oil Company, Oil Minister Abdelbari Arusi said on Saturday.
Two years of turmoil after the overthrow of leader Muammar Qaddafi, as well as tough contract terms, have prompted oil companies to reassess their role in the North African country, but the government has been keen to keep them.
Sources told Reuters this week that Marathon was blocked from selling its stake in Waha by the government which has first refusal on such a deal. A source said the state-owned National Oil Corp (NOC) was likely to offer Marathon below market value for the stake.
“They are staying here,” Arusi told reporters. "They told us they will continue with us.”
Marathon was not immediately available for comment.
Arusi also told reporters that Libya was considering buying gas from neighboring Algeria as it faces power cuts during peak demand, and said South Africa wanted to buy oil from Libya.
“We discussed that [South Africa] will buy some oil from Libya based on world market prices,” Arushi said after meeting Ohm Collins Shabane, minister in the South African presidency.
Both sides were also discussing working together on gas production in the Brega area, a coastal zone where Libya’s state industry is producing gas.
Shabane confirmed the two countries want to boost oil and other economic cooperation. “We are exploring possibilities in terms of... increasing our capacity to trade,” he said, without giving details.
Arushi also said Brazil’s Petrobas had written a letter to the oil ministry expressing its interest to continue their operations in Libya. The company, in Libya since 2005, operates an exploratory offshore block.
Arusi also said state-owned Sirte Oil Co was producing between 60,000 barrels a day and 80,000 bpd at Brega, dismissing reports of production cuts due to power cuts as “talk.”
Trading and local Libyan sources told Reuters on Thursday Libya did not plan to export crude oil from Brega port in
November, the only oil terminal still functioning in the east, after a fall in production.
A mix of striking workers, militias and political activists have blocked several of Libya’s major oil terminals for about three months, resulting in billions of dollars of lost revenues for the government and foreign oil companies operating there.
Marathon and ConocoPhillips each hold a 16.3 percent interest in the Waha concessions, Hess Corp. holds an
8.2 percent interest and Libya’s NOC 59.2 percent.
Marathon’s exit would have followed that of ExxonMobil, which said last month the security situation no longer justified a big presence, and Royal Dutch Shell, which last year abandoned two blocks after disappointing results.