Marathon struggles to exit Libya as unrest grows

Fri Oct 25, 2013 10:27am EDT
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By Lin Noueihed and Julia Payne

LONDON Oct 25 (Reuters) - Libya has blocked efforts by U.S. company Marathon Oil to sell its stake in one of the country's top oil ventures by moving to preempt a deal, sources said, highlighting the struggle investors face in cutting exposure to Libya's unrest.

Two years of turmoil since the Arab Spring and tough contract terms have prompted oil firms to reassess their role in Libya, and U.S. companies appear keenest to leave as they lack the proximity and infrastructure links that make North Africa attractive to their European peers.

Sources told Reuters in July that Marathon was considering the sale of its stake in Libya's Waha Oil Company, which has a maximum output capacity of 350,000 barrels per day (bpd) and produces the OPEC member's main light sweet crude grade.

Oil Minister Abdelbari Arusi later said Libya's National Oil Corp (NOC) could buy Marathon's stake though other companies, which he did not name, were also interested.

But a senior Libyan oil source said this week that Marathon had decided against selling the stake after talks with NOC.

Contracts require foreign oil companies to secure NOC approval for any sale and also give it the right of first refusal in the event of any sale, the source said.

"The company has changed its mind," he told Reuters. "Marathon as a partner indicated its desire to sell its shares. It had talks with the NOC and before receiving approval, I believe things changed for the company. The last I heard the deal was off."

A spokesman for Marathon declined to comment.   Continued...