* Marathon holds 16.3 pct stake in Waha Oil Company
* Waha Oil Co. as a whole valued at $3.5 billion-source
* Unrest and poor terms likely to reduce pool of interested
By Marie-Louise Gumuchian and Julia Payne
TRIPOLI/LONDON, July 26 U.S. oil company
Marathon Oil Corp is studying the sale of its stake in a
key Libyan oil consortium in a sign unrest in the country and
limited financial incentives are wearing down foreign firms,
sources familiar with the matter told Reuters.
Even though the stake is in one of Libya's most important
companies, the sale is likely to be difficult.
The company is part of one of Libya's most important joint
ventures, known as the Waha Oil Company, with Libya's state oil
company National Oil Corporation (NOC), Hess Corporation
The company declined to comment on the possible sale.
The consortium has a production capacity of around 350,000
barrels per day and exports the country's main light sweet grade
"Marathon is looking at selling in Libya. There have been
talks about it," an oil industry source in Libya said.
The source did not give a reason but cited the general
context of the Libyan oil industry with repeated disruptions to
the country's production due to protests and strikes.
The asset is unlikely to attract many interested parties due
to unrest in the region but also particularities to the asset
"Not aware of anything else being said or who might be
interested but I suspect someone comfortable with the regional
instability - probably limited to a few contenders," a regional
industry executive familiar with the matter said.
Another source close to the situation estimated the value of
the entire Waha consortium to be around $3.5 billion currently,
but the stake would be a hard sell.
"It's not super attractive because all the barrels are
spoken for and the fields are starting to deplete. It will
require a lot of investment and the tax regime is not
favourable," the same source said.
The country's exploration and production terms, known as
EPSA IV, are widely unpopular. Tripoli is expected to announced
a new set of terms in early 2014 but the deputy oil minister
made clear these would only apply to future contracts, with
existing ones left unchanged.
Marathon Oil and ConocoPhillips each hold a 16.3 percent
working interest in the Waha Concessions, Hess Corporation an
8.2 percent working interest and the Libyan National Oil
Corporation (NOC) holds a 59.2 percent working interest.
In the first quarter, production from Libya accounted for
about 7 percent of Marathon's total output.
The state oil company NOC has been struggling to maintain
production levels following the overthrow of dictator Muammar
Gaddafi in 2011.
Due to unrest, Libyan oil output hit less than 1 million
barrels per day in June due to multiple outages, down from its
normal level of 1.6 million barrel per day (bpd). It has since
recovered but one large field and one oil port remain closed.
Sales of crude oil and natural gas accounted for more than
10 percent of our 2010 annual revenues. The company's revenue in
2010 was $11.7 billion.