Libya will exercise its right to buy the assets of Verenex Energy Inc., blocking a roughly US$400 million deal that China had sought with the Canadian oil producer, said the country’s top oil official.
Libya will match the amount that China National Petroleum Corp. had agreed to pay for Verenex, Shokri Ghanem, head of Libya’s National Oil Co., said on the sidelines of an energy conference.. Libya wants to buy the company out of « commercial interest » as it tries to boost its oil-pumping capacity, said Mr. Ghanem.
« There are some formalities we are working out, » he added, but declined to elaborate.
In a prepared statement Wednesday, Verenex said that « it is unable to confirm or deny reports » that Libya plans to buy Verenex. CNPC wasn’t available to comment.
Calgary-based Verenex Energy said in late February that CNPC International Ltd., a unit of CNPC, had agreed to buy the company for 10 Canadian dollars a share (US$7.88).
But a pre-emption clause in that deal gives the Libyan government the right of first refusal to buy Verenex’s assets, including its main holding, a 50% stake in an oil block in northwest Libya, an area rich in hydrocarbons.
Libya has the highest proven oil reserve in Africa, at 42 billion barrels. The country is hoping to raise production capacity to 3 million barrels a day from around 2 million barrels a day by 2013 with the help of foreign oil companies.
China had hoped to add Verenex’s assets to a hoard of others that state-run Chinese energy companies have been snapping up around the world in recent years to secure supplies for the country’s development needs.
Source : Konaxis
