UK oil explorer moves into Libya

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The Independent Online

A British oil explorer today revealed a push into Libya despite ongoing uncertainty over the battle-weary country's future.

Jersey-based Heritage Oil said it had paid 19.5 million US dollars (£12.6 million) for a 51% controlling stake in Benghazi-based Sahara Oil Services, which runs onshore and offshore fields.

The announcement comes as ousted leader Muammar Gaddafi remains missing and bloodshed continues to rock the North African state.

Tony Buckingham, chief executive of London-listed Heritage, said his firm was "well placed to play a significant role in the future oil and gas industry in Libya".

Heritage, which operates in Iraq, the Democratic Republic of the Congo, Pakistan, Mali, Tanzania, Malta, Pakistan and Russia, said the stake was bought through wholly-owned subsidiary Heritage Energy International.

The group, which reported a 9.6 million US dollar (£6.2 million) pre-tax loss in the six months to June 30, compared with a 12.3 million US dollar (£7.9 million) loss the previous year, said it would use the Sahara Oil acquisition as a starting point for access other opportunities in Libya.

The deal would give Heritage legitimate access to the rehabilitation of formerly state-run fields.

In the last five months the firm has established a base in Benghazi and said it has been in discussion with members of the National Transitional Council, the interim government in Libya.

However, a report suggested there was some confusion over whether the transfer of licences, which is overseen by the NTC, has been completed.

Benghazi, Libya's second largest city, was taken by revolutionary forces in February, and has been a rebel stronghold since the conflict broke out.

Rebels continue to fight forces loyal to former leader Colonel Gaddafi on two major fronts - in the northern cities of Sirte and Bani Walid - as well as pockets deep in the southern desert.

The head of the NTC, Mustafa Abdul-Jalil, and de facto prime minister Mahmoud Jibril yesterday named a new cabinet and promised to step down after the country is fully secured.

The interim government has promised to hold elections eight months after the end of fighting.

Richard Griffith, analyst at Evolution Securities, said the move could "prove to be a very shrewd investment".

However, shares in Heritage were down more than 1% after the announcement.