EU confirms NOC, 5 other Libyan firms added to sanctions list

London (Platts)--24Mar2011/739 am EDT/1139 GMT

The EU confirmed Thursday in its official journal its decision a day earlier to add Libya's National Oil Corporation and five other Libyan oil companies controlled by NOC to its sanctions list.

As well as NOC, the list has been extended to include Azzawiya Refining, Ras Lanuf Oil and Gas Processing Company, Brega, Sirte Oil Company and Waha Oil Company, the journal reported.

Arabian Gulf Oil Company has not been included among the companies subject to EU sanctions, however, despite its inclusion earlier this week on a US list of 14 NOC-controlled companies whose assets will be frozen by the US Treasury.

Benghazi-headquartered Agoco broke away from NOC early during the Libyan conflict to ally itself with rebels against the rule of Moammar Qadhafi. The UN has recognized the rebels' National Transitional Council, which late last week established a separate oil authority led by Agoco to oversee activities in areas under rebel control.

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Before the current crisis, Agoco's area of operations accounted for roughly 40% of Libyan output of around 1.6 million b/d. Agoco also operates an oil refinery and oil terminal at Tobruk.

Agoco has been offering Sarir crude directly to European buyers, market sources said earlier this week, although they added that these offers had been declined because of the complicated situation in Libya.

Waha Oil Company is the biggest of NOC's subsidiaries, accounting for around 350,000 b/d of total Libyan crude production. The former Oasis group --Marathon, ConocoPhillips and Hess -- in 2005 reached an agreement with the Libyan government to resume work in the country almost 20 years after the then-US President Ronald Reagan accused Qadhafi of supporting terrorism and ordered all US companies to leave.

NOC holds a 59.16% working interest in Waha with ConocoPhillips and Marathon holding 16.33% each and Hess 8.13%.

As early as March 3 Marathon said it had stopped making tax and royalty payments to the Libyan government in accordance with US sanctions. It said it had some $760 million invested in property, plant and equipment in Libya.

At its peak a few decades ago, Waha produced as much as 1 million b/d but this dwindled due to the relative lack of activity while the US companies were out of the country and more recently had running at around 350,000 b/d.

The Waha partners have also been involved in developing what ConocoPhillips has described on its website as four major growth projects: Faregh II, North Gialo, NC-98 and Dahra-Jofra.

Although Waha is the biggest single producing concession in Libya, Italy's Eni is the biggest foreign oil operator in the country with 280,000 boe/d.

Eni has continued to produce some 10 million cubic meters/day of gas in the country despite having halted its Libyan oil output of 115,000 b/d since the anti-Qadhafi protests erupted in mid-February.

Eni also suspended Libyan gas imports through the Greenstream pipeline under the Mediterranean Sea on February 22 as a result of the uprising.

CEO Paolo Scaroni said March 11 that Eni had not shipped any oil cargoes from Libya since the first week of March and reiterated that it would willingly halt its oil and gas dealings with the country if the EU decided to extend its existing sanctions.

Other European oil companies working in Libya include France's Total, Spain's Repsol, Austria's OMV and Germany's Wintershall.

--Margaret McQuaile, margaret_mcquaile@platts.com