Libya criticises Shell over operations suspension

ALGIERS, July 9 (Reuters) - Libya’s National Oil Corporation (NOC) accused Royal Dutch Shell on Monday of failing to meet its commitments in Libya and said the London-listed company’s decision to abandon two wells was not based on an objective assessment.

Shell said in May it suspend drilling and abandoned exploration in two Libya blocks because disappointing results meant further exploration could not be economically justified.

“The National Oil Corporation believes that Shell’s negative assessment of the blocks... does not reflect the reality of the blocks, as some other companies made oil and gas discoveries at the same blocks during the 1960-1970 period,” NOC said in a statement on its website (

“Shell has recently tried to request the annexation of those blocks, which confirms these areas are rich in oil and gas resources.”

The Libyan oil firm also accused Shell of not implementing a deal concluded in June 2008 involving the drilling of six wells at new fields over a five-year period.

“The company had not started drilling any well by the time it announced force majeure on March 22, 2011, but had only completed a seismic survey,” said the statement.

“Shell has not lifted the force majeure compared to its activities in other countries where conditions are more difficult than Libya.”

Shell said in May it planned to keep an office in Libya and had agreed with the NOC to actively pursue upstream opportunities.

But NOC said Shell had not even notified it of its decision to withdraw, making the announcement through the media.

The NOC acknowledged that Shell had not made any significant discoveries since the start of its operations in the North African country.

“These results were aggravated recently when Shell concluded two agreements with the National Oil Corporation including one through direct negotiation,” to develop a liquefied natural gas plant at Marsa Brega, it said.

“During the preliminary discussions, the company confirmed it had the technical and financial capacity to achieve good results regarding the two agreements... but the company has not met its commitments for the exploratory activity and modernizing the gas plant.”