Libya calls tenders

Press, Volume CXIII, Issue 33413, 20 December 1973, Page 15

Libya calls tenders

(N.Z.P.A.-Reuter—Copyright)

TRIPOLI, December 19.

The Libyan Government will sell its oil to purchasers who link their bids with development projects, according to informed oil sources in Tripoli.

The Government has about 900,000 barrels of oil a day at its disposal —slightly more than half the country’s production, and has called for tenders today.

It is apparently seeking to increase the price of Libyan oil, following the example of Nigeria, where a similar devel o p m e n t-linked sales scheme recently boosted market prices to nearly SUSI 7 a barrel.

The Tripoli sources predict offers of SUS2O a barrel—a sharp increase on the [present maximum of SUSI 3. Owners and operators of I oil refineries, but not bro-

kers, have been asked to submit written tenders for all the Government’s oil, coupled with plans for development projects in oil, agriculture, and industry. Contracts will be on a one-year renewable basis, from January 1. The sources say that the price increase expected under the new system is bound to affect Western oil companies in Libya: they forecast that the Occidental company and the Oasis group will have to pay higher prices for their own 51 per cent share of the oil they produce. Under agreements reached last August, the “buy-back” price is pegged at SUS7.SB a barrel until February or March next year.

Brazil, Ghana, Japan, Poland, and Jugoslavia had all tried to buy oil from Libya directly since the beginning of the reductions in production by Arab countries. But, the sources say, only Jugoslavia seems assured of obtaining cheaper Libyan oil, because of President Gadaffi’s recent visit to Belgrade, and because of Belgrade’s pro-Arab stand. Libya imposed a 25 per cent production cut-back in mid-November, and banned all oil export: to the United States and the Netherlands, which she accuses of favouring Israel. The total production loss is about 33 per cent.