Heritage deal denied by Libya's oil champion

Tom Bawden@BawdenTom
Saturday 22 October 2011 08:34

The dangers of doing business in Libya were highlighted after the National Oil Company (NOC), through which Colonel Gaddafi controlled the industry for decades, vetoed this week's takeover of a domestic operator by Britain's Heritage Oil.

Heritage announced the $19.5m (£12.7m) acquisition of Benghazi-based Sahara Oil Services on Tuesday, claiming the deal put it ahead in the race among the next generation of explorers seeking to tap Libya's vast and underdeveloped hydrocarbon reserves. But, a day later, the NOC declared the deal void.

The NOC has traditionally controlled Libya's oil industry, awarding exploration licences and producing about half of the oil itself. Ahmed Al-Taghdi, the director of international cooperation of NOC, said: "I have been instructed to deny these reports [of the Sahara deal]. We have put it on our website that it is not true."

Heritage reacted angrily to the NOC's comments, saying it had no control over the deal and dismissing its comments as irrelevant.

Heritage said that the group had not sought permission from the National Transitional Council (NTC), the NOC, or any other party other than Sahara, because it did not need it.

Analysts said that the Heritage case underlined the confusion felt by many oil companies considering moving into Libya, with nobody sure who makes decisions and whether they would be honoured when the country stabilises.

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