BP Expects to Start Libya Oil Exploration Drilling Next Year
BP PLC expects to start next year deep-sea drilling work off the coast of Libya, as the U.K. oil giant resumes it $2 billion exploration program halted by the rebel overthrow of Col. Moammar Gadhafi's regime last year.
The major oil company, which in May lifted a freeze on its activities in the North African country, will shortly begin the preliminary work needed before it can start drilling exploration wells, a BP spokesman said. Drilling itself will likely start some time before the end of 2013, he said.
London-listed BP is deciding on contractors to do underwater geological surveying, a tender invitation posted on the Libyan National Oil Company website showed. The deadline for tender submissions was Aug. 14.
As part of a deal agreed in 2007, BP will explore the frontier Sirt basin, which the company has described as being equivalent in size to more than ten of its deep-water blocks in Angola.
Under its 2007 contract, BP has already acquired 31,000 square kilometers of three-dimensional seismic data both offshore and onshore, where it holds acreage positions in the Ghadames basin in Libya's western desert.
BP has put increased exploration at the heart of its strategy as its attempts to set a new course in the wake of the 2010 Deepwater Horizon disaster. Chief Executive Bob Dudley wants the company to drill as many as 25 new exploration wells a year by 2013, which he hopes will help drive increased cash flow and allow it greater flexibility to return money to shareholders.
The company's stock still trades at a significant discount to peers like Royal Dutch Shell PLC, as investors price in the prospect of massive fines stemming from Deepwater Horizon, which triggered the worst offshore oil spill in U.S. history.