16 Dec 2019 10:00

Gazprom-Wintershall Dea JV, Libya's NOC sign exploration, production sharing agreements for two blocks

MOSCOW. Dec 16 (Interfax) - Wintershall AG, a joint venture between Wintershall Dea and Gazprom International, and Libya's National Oil Corp. (NOC) have signed two exploration and production sharing agreements (EPSA) for Areas 91 (former Concession 96) and 107 (former Concession 97) in the onshore Sirte Basin.

Wintershall AG and NOC will form a joint operating company (JOC) named Sarir Oil Operations that will be 51% owned by NOC and 49% by Wintershall AG, Wintershall Dea said in a press release. The JOC will assume operational responsibility in both contract areas following a transitional six-month period.

The parties will share operating costs at a ratio of 88% (NOC) to 12% (Wintershall AG), Gazprom International, a subsidiary of Russian gas giant Gazprom , said in a statement. Production will be shared according to a formula agreed by the parties.

The terms of the EPSA for Area 91 will last until 2036 and the terms of the EPSA for Area 107 will last until 2037.

Gazprom International Germany GmbH, a division of Gazprom International, acquired a 49% stake in Wintershall AG's C96 and C97 concessions in 2007 as a result of an asset swap with BASF. These are among the oldest oil concessions in Libya, with production dating back to the 1970s. Nine fields have been discovered in the contract areas, the largest of which, As-Sarah in C96, was launched in 1988.

Since 2011, due to the turmoil in Libya, crude production and shipments have been intermittent, depending on the situation in the country. Gazprom International said on its website that production resumed in 2016 after it became possible to pump oil to export terminals. This was free flow production at As-Sarah in the amount of about 35,000 barrels per day.