Libya denies oil negotiations with Bula

Libya's National Oil Company (NOC) has categorically denied reports of negotiations on oil permits with Ireland's Bula Resource Holdings. In a fax published today by the authoritative Nicosia-based oil journal, Middle East Economic Survey, the Libyan company dismissed suggestions that Bula had commenced negotiations on specific "packages" and said stories in the press alleging this have "no foundation." The fax said: "NOC would like to confirm that it has neither started discussions with Bula on any of the open blocks (of territory set for exploration and exploitation) nor finalised procedures on the selection and negotiation process with all bidders." This is the second time in the past year NOC has denied press reports on Bula's alleged activities in Libya.

The oil journal published a similar denial in January 2000 after Bula accompanied a new share issue with reports about the company's plans to secure "licences for exploration and production acreage" in North Africa and the Middle East. The journal related certain news leaks to a rise in the price of Bula shares. It said: "On 12 January 2000, the London Daily Mirror reported Bula had made a major oil discovery in Libya and, according to Reuters, that report caused a one-day surge of 26 per cent in Bula's share price on the London Stock Exchange." NOC reacted to these reports "with astonishment and disbelief" and stated that Bula did not "hold any interest in blocks or concessions in Libyan territory." Negotiations with Bula and other concerns were ongoing, NOC said. Despite the denials, the price of Bula shares continued to rise, according to the journal "netting another $1.55 million in January 2000 and $2.9 million in February". It characterised the reports as "questionable" because investors clearly expected that Bula's activities in Libya would culminate in lucrative agreements.

The publication continued: "Company officials have pointedly kept the market and shareholders focused on such forays." Bula chairman and former Irish Prime Minister Albert Reynolds in the latest annual report said "much time has been spent in the course of the year in progressing negotiations to obtain binding agreements for blocks in Libya", adding that "discussions have continued throughout the year to obtain formal ratification by the General Peoples Committee of Libya." Although this statement gave the impression that a deal was imminent, on December 18th Bula's new CEO, Mr John Hogan, announced only that negotiations were progressing. Furthermore, Mr Hogan presented the termination of relations between NOC and Bula's local representative as a positive move and said he would play a "prominent role in leading Bula's discussions with NOC in the future," the oil journal stated.

Following a 1998 "scandal" over Bula's reliance on falsified information concerning "strong oil flows" in Russian fields where the company had an interest, the journal asserted, "Bula share prices have risen and fallen on the strength of the company's rumoured connections with Libya."

No spokesperson for Bula was available for comment yesterday.