Taiwan oil firm to drill in Libya

Dec 21, 2006, 9:52 GMT

Taipei - Taiwan's state-run Chinese Petroleum Corp (CPC), in a bid to diversify its oil sources, has won the right to drill for oil in Libya, the company said on Thursday.

CPC has won the bid to explore for oil in Block Murzuq 162 and expects to sign the contract in January with Libya's National Oil Corp (NOC), CPC said in a statement.

CPC will set up a branch company in Libya - Overseas Petroleum and Investment Corp (OPIC) - to be in charge of oil exploration in the country and will hire consultants to draft contracts, the statement said.

On September 16, isolated Libya invited tenders for oil exploration in 41 blocks, considered Africa's largest petroleum reserves.

CPC submitted bids for two blocks but won the rights to drill at Block Murzuq 162, an inland block, 4,300 square kilometres, estimated to contain 500 million barrels of oil.

   The exploration and contract fee for each block is 4.2 million-5.2 million US dollars. CPC will invest 39 million US dollars in the next three years to conduct seismic surveys drill three test wells.

   Libya has become a new destination as Taipei-Tripoli ties have warmed since    Libyan leader Moamar Gaddafi's son Saif Gaddafi visited Taiwan in January to launch unofficial ties with Taipei. In May, President Chen Shui-bian made a secret visit to Libya and reportedly met with the senior Gaddafi to discuss cooperation in the absence of formal ties.

Taiwan, an island with few natural resources, relies on imports for 98 per cent of its energy needs. CPC has signed long-term contracts to buy oil from abroad and is also exploring for oil in many countries to diversify its supply.