The Libyan Ministry of Oil and Gas said that it had taken note of the statement of the Chairman of the Arabian Gulf Oil Company’s Management Committee regarding the National Oil Corporation’s (NOC) intention to sign contracts with a coalition of companies: (Italian Eni), (UAE's Adnoc) and (French Total) and agree to grant them a 40% share of production.
The Ministry of Oil confirmed in a statement that this quota is considered, by all standards, very high and unprecedented compared to the quotas currently in effect in Libya, adding that it is considered a quota that disturbs the balance of oil contracts in Libya.
"This came as a result of not following the oil contractual arrangements in force in Libya. The Libyan party has lost its wealth, and this will create an imbalance in the Libyan oil contracts. The NOC chose to negotiate with one contractor, Italy's Eni, a procedure that is considered a violation of contractual legislation in Libya because it did not obtain the approval of the Ministry of Oil and Gas nor that of the government for the unilateral negotiation before it had begun." The statement reads.
The statement pointed out that the NOC could have obtained a higher share in production if it had offered this field in an open and transparent international bid, saying that the NOC would also have been the best test for international companies to accept working in Libya.
The Ministry pointed out that granting the foreign party 49% and the Libyan party 51%, is a type of contract that is considered a (participation contract) not (concession contract), adding that such oil operations began in the 1950s with a system of concession contracts that don't grant any share to the Libyan party, but rather pay it a financial value in the form of taxes, royalties and rents.
