Oil industry: Wintershall Dea transfers the exploitation of the fields of the Syrte basin to a mixed company

Present since 1958 in Libya, the German oil and gas producer Wintershall Dea declared on Thursday 29 October 2020 the transfer of the exploitation of the Sirte fields to the mixed company Sarir Oil Operations (SOO).

A classic operation in the Libyan oil industry

Wintershall Dea will transfer the operation of the onshore fields in the Sirte basin to SOO by the end of the year. This new operator will be 51% owned by the National Oil Company (NOC) and 49% by the German firm. It will operate areas 91 and 107 (previously 96 and 97) in the Sirte coastal basin.

The NOC’s intervention is not a surprise. Indeed, the system put in place since Gaddafi’s regime makes the state company the key player in the Libyan oil industry. If multinationals are present in Libya like Total for France, Gazprom for Russia or Wintershall for Germany, they must most often contract with the NOC generally in the form of joint ventures.

The Sirte Basin: a mecca for the global oil industry

This area has been the focus of attention for several years and the proof: it contains 70% of the country’s oil reserves! The As-Sarah field, which is the subject of this report, produces about 55,000 barrels per day. Located in the municipality of Al-Wahat, it was until now the largest field in Wintershall’s Libyan assets (which has a total production of about 80,000 barrels per day).

So why this sudden transfer in a highly coveted area? On January 17, 2020 oil infrastructure was blocked by supporters of Marshal Haftar as part of his conflict against the Government of National Unity. This blockage continued for many months, effectively suspending oil production in Wintershall Dea’s Areas 91 and 107.

In a press release the German company stated that, despite the current health and geopolitical context, the entire transfer process was able to work. The majority of Wintershall Dea’s staff has been transferred to SOO and the German company has agreed to cover the exploration costs on both zones and half of the development costs. In addition, Wintershall Dea will provide $150 million for CSR projects and would drill two new wells in Area 107.