Bula Resources, the exploration company, has announced it is in negotiations to form a strategic partnership with Oilinvest, an oil refining and retail company which is 45 per cent owned by Libyan state entities.
Bula, which is also in negotiations with the Libyan National Oil Company (NOC) to ratify exploration licence agreements, informed the stock exchange of the move yesterday, stating that the partnership's purpose would be to engage in worldwide oil exploration, development and production activities.
Bula stated that Oilinvest, which is registered in Holland, has a 250,000-barrel per day refining capacity and a distribution and service station network trading of 3,500 outlets under the name of Tamoil across Europe.
The chief executive of Bula, Mr Tony Peart, said he could not comment on the share ownership of Oilinvest beyond the fact that it was 45 per cent-owned by Oilinvest International NV and 55 per cent owned by Europe Oil Netherlands Holdings. But he said Oilinvest was interested in going "upstream" and in the licences under negotiation with the Libyan government. "Oilinvest is interested in getting involved in new opportunities in Libya, as we are. Also, the aim is to expand outside of Libya into neighbouring countries," he said.
The Irish Times understands that the chairman of Bula, Mr Albert Reynolds, travelled to Monaco this week and initiated the partnership discussions. Oilinvest has refineries in Germany, Switzerland and Italy and also has interests in Spain. It has about 2,000 petrol stations in Italy, and other outlets in Germany, Switzerland, Spain, Hungary and the Czech Republic.
Oilinvest was established in 1988 by Libyan state-owned companies, who reduced their stake in the company to 45 per cent after the UN Security Council passed a resolution in 1993 to freeze Libyan capital interests abroad. Since the sanctions were suspended by the UN last April, Libya was "pretty much open for business," according to Mr Peart.
The NOC is expected to announce a new international bidding round for licences in previously unexplored areas, but reserves of crude are plentiful, with average production costs at $2.50 a barrel.
