State-owned Chinese Petroleum Corp (CPC,
The contract with state-run Libya National Oil Co will allow CPC to search for oil and gas in the 4,300km2 exploration zone in the Murzuq basin in southwestern Libya, CPC said in a statement.
Overseas oil exploration has become increasingly important for CPC because high oil prices this year and limited ability to raise domestic prices because of government controls have resulted in losses.
The company expects to invest a total of NT$1.27 billion (US$39 million) over a three-year period and plans to drill three oil wells in that area.
CPC estimates the zone may contain 500 million barrels of oil.
The company put in bids for two out of 14 exploration projects offered in Libya's latest international licensing round, CPC media liaison officer Jessica Tang (
Russia's Tatneft landed three contracts. Russian Gazprom, Canadian PetroCanada and German Wintershall were each awarded one contract.
Libya will announce its decision on three other contracts in a week, while there were no bids for four others.
Taiwan's largest refiner by capacity began studying Libya as a possible oil exploration target last year, following the lifting of most US sanctions against the African nation in 2004.
CPC has oil exploration projects off the coast of Taiwan, in the US, Venezuela, Australia, Ecuador and Chad. They have produced few results, according to company data.
All the crude oil extracted overseas by CPC is refined and sold in foreign markets, Tang said.
President Chen Shui-bian (
The Libya field will be the refiner's second in Africa. Taiwan wants to break a reliance on shipments from the Middle East, source of 80 percent of its oil, seeking fields in Africa and elsewhere.
CPC has a contract with Chad's government to explore for oil and gas in three area. It has also been in talks with Nigeria for possible investment.
The Middle East accounted for four-fifths of Taiwan's oil imports last year, chiefly from Saudi Arabia, Kuwait and Iran, according to the government's energy bureau. Overseas shipments account for more than 99 percent of oil needs.
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