By Hadi Fornaji.
Tripoli, 27 October 2013:
Marathon Oil’s much-rumoured plans to pull out of Libya appear to have been abandoned. Oil Minister . . .[restrict]Abdulbari Al-Arusi, said today that the company had told him that it intended to stay.
The US oil firm had reportedly been touting its 16.3 percent stake in Waha Oil for some time and had attracted interest from both Total and the China National Petroleum Corporation. Marathon was said to want out because of deteriorating security and the regular disruption to oil fields, pipelines, refineries and export terminals.
Sources at the National Oil Company however were reported by Reuters as saying that it had first refusal on Marathon’s Waha Oil holding and had indicated that it would assert that right. NOC owns 59.2 percent of the company while ConocoPhillips also holds 16.3 percent and Hess the remaining 8.2 percent.
It seems likely that the Texas-based oil company recognised that any purchase of its Waha Oil interests by NOC would likely be below market value. Moreover, since NOC has no cash flow of its own, the cheques would be written by a cash-strapped government that has already lost approaching $6 billion this year in oil sector disputes and blockades. Therefore the sale will probably have seemed neither swift nor financially attractive.
On top of this, given the complete pull-out last year by Shell, the shelving of BP’s plans to have resumed its Libyan operations by this autumn and Exxon’s sharp scaling back of its Libyan activities, NOC may have felt that another international oil company heading for the door would boost alarm among other players. It therefore chose to use the leverage provided by its option to buy out Marathon, in the expectation that at worst, it would delay the American company’s departure. It has not been possible to contact Marathon Oil for comment. [/restrict]