Three U.S. oil companies said on Thursday they will end a 19-year absence in Libya and pay $1.83 billion to resume oil production.
ConocoPhillips Co., Marathon Oil Corp. and Amerada Hess Corp. will share the production from a 350,000 barrel a day operation with the Libyan National Oil Corp.
The return to Libya reflects renewed U.S. interests in the North African country after the U.S. government last year lifted nearly two decades of economic sanctions.
In a February 2005 report, the U.S. Department of Energy said Libya is ready to become a major oil exporter again, especially to Europe.
ConocoPhillips and Marathon, both of Houston, will have slightly more than 16 percent interest each; New York-based Hess will have about 8 percent; Libya’s NOC will have 59 percent.
The terms of the 25-year deal are similar to those when it was suspended in 1986, the companies said.
Conoco and Marathon will pay $520 million each to the NOC; Amerada Hess will pay $260 million. Additionally, Conoco and Marathon will pay $212 million each to cover Libya’s costs to maintain the oil fields; Amerada Hess will cover $106 million.
ConocoPhillips said the move will add about 45,000 barrels a day of production; Marathon said it would mean about 40,000 to 45,000 barrels a day and Amerada Hess said the deal represents about 20,000 to 25,000 daily barrels for it.
Oil companies worldwide have been seeking to renew as well as pursue new exploration and production rights in Libya.
Earlier this year, Occidental Petroleum Corp., Chevron Corp., and Exxon Mobil Corp. as well as Amerada won exploration and production licenses.