Libya to investigate Canadian oil firm

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Libyan authorities are investigating allegations that a small Canadian oil company was improperly pre-qualified to bid for exploration rights in the North African country, tactics that seem aimed at nationalising the company’s Libyan assets.

The investigation could undermine the legal basis for Verenex Energy to operate in Libya just as the company had attracted a takeover offer from a Chinese state-owned oil company, and could potentially enable Tripoli to seize the company’s assets cheaply. In a statement on its website, Verenex, which is the smallest foreign company with exploration rights in Libya, said it still had not received consent from Libya’s National Oil Corporation (NOC) for the proposed C$499 million (Dh1.59 billion) takeover by China National Petroleum Corporation (CNPC), despite agreeing to pay a C$46.7m “approval bonus” to expedite clearance for the deal.

It also disclosed the existence of the Libyan investigation, saying it considered the allegations were “without merit”. “The allegations are being made more than four years after the award of exploration rights under a transparent bid process and coincident with a request for consent for the sale of the company,” Verenex said.
Over the past four years, Verenex has made a string of oil and gas discoveries in Libya, giving the company more than two billion barrels of oil reserves.

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