NEW TEMPTATION FOR THE ECONOMIC LOBBIES IN VIEW
A STRATEGIC PARTNER WOULD REV UP BULGARIA'S CONCESSIONS IN LIBYAIf Bulgaria presents to Libya a preliminary contract with any of the world aces in oil industry, the authorities of the Jamahiria are ready to renegotiate the clauses in the notorious interstate agreement EPSA-80 from the year 1979. The good news was broken to the BANKER weekly by Deputy Minister of Economy Nikola Yankov who attended the governmental delegation, headed by Deputy Premier and Minister of Economy Nikolai Vassilev, which paid a visit to Tripoli last August 17-19. The so-called EPSA is the working name of the agreement, signed 23 years ago between Bulgaria and Libya, entitling our country to prospect and afterwards exploit two oil fields in Libya in the region of Murzuk and Gadames. Under the the agreement, if the Bulgarian prospecting drills found petroleum, our country could begin extracting it together with Libya's National Oil Corporation (NOC). The profit from the sale of output were to be distributed between the two sides in a ratio of 85% for Libya and 15% for Bulgaria. In order to start such a business, however, Bulgarian geologists had to fulfill a condition that seems simple on the face of it. They had to submit to the Libyans a technical and economic report about the quantities, found in the above-mentioned deposits. Although prospecting (on which the Bulgaria Exchequer spent almost USD200MN) was finalized in 1987, the authorities in Libya have not seen a Bulgarian report. For a 15th year now the Libyans are watching the fun and the clock is counting the time left. The term for granting Bulgaria concession rights elapses on March 15, 2005.Within the three years left Bulgaria at last stands a real chance of returning at least partially its investments. Mr. Yankov explained it became evident from the conversations with Libya's NOC last Saturday and Sunday that the Jamahiria's authorities were exceptionally well-meaning for the issue's settlement. They're ready, he said, not only to extend the term of the so-called EPSA-80, but also reconsider some of its clauses. It is possible to negotiate a more advantageous ratio for Bulgaria in the distribution of profits if it comes to joint exploitation of the deposits. According to Mr. Yankov, the Libyans do not object to that, provided that Bulgaria finds a strategic partner (approved by them) for joint exploitation of the deposits. This would practically mean setting up a joint venture (JV) in which the foreign partner would be a majority shareholder because investments of more than USD300MN would be necessary for developing the concessions. Bulgaria could not ensure such an amount of money. If things go well, our country (although with a minority share in the JV) could make good profits from Libya's oil, especially if Bulgarian geologists' claims about the deposits come true. According to them, more than 200,000,000 barells of petroleum and almost 20,000,000 cu m of gas, worth a total of USD4BN are lying under Sahara's sands.Since 1999 interest towards these deposits and partnership with Bulgaria has been showed by giants in the petroleum industry, such as the British companies Lasmo and IPC, Spain's Repsol, Germany's Winter - Shell, the Arabian Nimir, and Russia's LUKOilThe Deputy Minister of Economy Nikola Yankov (a former executive director of Naftex) has so far refrained from specifying the names of the foreign companies, with which negotiations for an eventual cooperation are going on. We'll prepare a short-list, to be approved by the Cabinet, and submit it to Libya's NOC, Mr. Yankov explained for the BANKER weekly. According to him, the negotiations could be completed within a year.In order to start negotiations, however, the problem regarding the required technical and economic report about the found oil and gas deposits, should be finally settled. Mr. Yankov specified that the authorities of the Jamahiria wanted the report to be drafted by a prestegious company, acquainted with the international standards in oil industry. Only a report written in compliance with these standards could be approved by Libya's NOC. We'll be looking for French, British, or US companies, that could cope with the task, the Deputy Minister of Economy added.On Monday (August 19) it became clear as well that Bulgargeomin could regain its positions in the extraction of Mongolian gold. At least, the company's Board of Directors (BoD) Chairman Andrei Atanassov claims so to the BANKER weekly. On that date he and Orfei Petrov, Chief Expert in the Ministry of Economy, returned from Mongolia where they attended a meeting of the Bulgarian-Mongolian JV Mongolbolgargeo Co in their capacity as BoD members. According to Mr. Atanassov, the JV for extraction of gold is already stabilizing. Its outstanding debt of USD1MN-plus has been settled. However, no Bulgarian have gone back to work there, although about 1.5 t of gold is yet to be extracted from the deposits. Only Mongolians are working there at present. Mongolia and Bulgaria each hold 50% in the JV. Mr. Atanassov explained that Bulgaria's share has been slated for privatisation on the decision of Mongolia's authorities. The fate of Bulgaria's 50% in the JV is not yet clear. It is also in the hands of Deputy Premier Nikolai Vassilev's team.