IOC beats MNCs to bag Libya oil block

NEW DELHI: State-owned refiner Indian Oil Corporation has taken its first successful step in exploration business, bagging an oil block in Libya against tough competition from US multinationals.
Indian Oil and its partner Oil India Ltd won the onshore Block-086 in the highly prospective Sirte basin in a global competitive basin. The two firms had last month decided to join hands for exploration ventures abroad.
"Coming close on the heels of the breakthrough in Iran, the development in Libya marks the arrival of IndianOil''s big-ticket investment in exploration and production," IOC chairman M S Ramachandran said.
The victory in Libya as also the fact that the combine did not pay any signing bonus, marks the success of co-ordination between the two bidding partners. Poor co-ordination among bidding partners has cost the country such deals a number of times in the past, spurring oil minister Mani Shankar Aiyar to consider a move to merge the existing oil companies to create one or two mega oil entities in the public sector.
Under the licence, IOC-OIL will get 18.4 per cent share of any future production in the block measuring 7,087 sq km. The remaining 81.6 per cent will go to Libya''s national oil company. If oil is proven in the licence areas, Libya, which is a member of the Organisation of Petroleum Exporting Countries, will fund half of the exploration and development costs.
Since IndianOil lacks exploration experience, OIL will be the operator of the block.
The IOC-OIL victory also stands out in face of US giants sweeping 11 of the 15 fields on offer, the first after the lifting of the US sanctions. Altogether 56 international companies had bid for the 15 fields.
IOC-OIL will bid for at least two out of the 40 licences Libya proposes to offer in the second round next month.