Heritage plants UK flag in Libya with takeover of Sahara Oil - Business News - Business - The Independent

Heritage plants UK flag in Libya with takeover of Sahara Oil

Heritage Oil staked its claim to Libya's vast hydrocarbon reserves yesterday with the $19.5m (£12.7m) acquisition of a small oil and gas services provider based in Benghazi.

The FTSE-250 explorer, thought to be the first foreign oil company into Libya after the uprising, will use the takeover of Sahara Oil Services as a platform to explore Africa's largest petroleum reserves.

Heritage, which entered Benghazi and set up a base in May, said the acquisition of 51 per cent of Sahara will give it the necessary permits and licences to carry out oil field services in Libya.

More importantly, it will give it the right to bid for lucrative licences to explore for and produce oil and gas.

The Jersey-based company has a history of moving early into unstable, oil-rich regions that pose significant personal and operational risks, such as Uganda and Kurdistan.

Heritage has assembled a team of "fixers" to call on to help negotiate the often hazardous geopolitical terrain it must conquer in its quest for oil in war-torn regions.

John Holmes, a former SAS commando who holds a Military Cross, is understood to have been smoothing the company's path in Libya.

Mr Holmes worked with Heritage chief executive Tony Buckingham – Jersey's richest resident and a former partner at the South African mercenary provider Executive Outcomes, whose first exposure to the oil industry was as a North Sea diver. Heritage insisted Mr Holmes "is not a member of staff or an employee of ours" – but pointedly refused to deny that he had worked for the company on a consultancy basis.

Paul Atherton, Heritage finance director, said that in the past few months the company had held discussions with a range of key participants in the Libyan oil industry such as senior members of the National Transitional Council (NTC) and the National Oil Company.

"To the best of my knowledge we were the first international oil company to go into Libya and the others have only started to come back in the past three or four weeks," Mr Atherton said.

"We've been there all summer, in discussions and negotiations, and these continue." Libya has 44 billion barrels of proven oil reserves, making it the biggest known resource in Africa and the ninth largest in the world, according to the International Energy Agency.

As the NTC consolidates its grip on the country the big oil majors are circling. Italy's Eni and France's Total are partially back up and running.

BP and Shell, which are both at the stage of exploring for oil rather than producing it, have yet to return to the country since evacuating staff during the uprising.

Both are looking to return and are in discussions with the NTC.

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