Shell, BP strike deals to buy Libyan oil.

Catogory : Market Report

Shell and BP agreed annual deals to buy Libyan crude, underscoring how the North African country’s recovering production and improving security are enticing some of the world’s largest oil companies.

Shell’s deal with Libya’s National Oil Corp. was the first of its kind since 2013 and Europe’s biggest oil company will load its first cargo under the contract within days, according to people familiar with the matter, who asked not to be identified because they’re not authorized to talk to the media. BP, which didn’t have a term deal in 2017, also reached an agreement for this year.

Libya pumped the most oil in four years in 2017 amid signs that the worst of a conflict that hobbled output was being resolved. While the return of Shell and BP to its list of customers would be good news for Libya, fi. Boosting it will also be challenging because Libya made a commitment to OPEC to limit supplies to reduce a global surplus.

In August, Shell bought its first shipment of Libyan crude in five years in a spot deal. Neither company was on the NOC’s list of 2017 term buyers, which includes companies such as Vitol Group, Glencore Plc, Total SA and OMV AG.

Libya’s oil production returned to about 1 million barrels a day earlier this month.