Libya is considering whether to intervene in a $450 million deal that French major Total SA (NYSE: TOT) announced last month to buy a Marathon Oil Corp. (NYSE: MRO) stake in the country's Waha concessions, several sources familiar with the matter told Reuters.
Officials were considering a range of options ranging from pushing for better—to a counter-offer from the state National Oil Corp. (NOC), the sources said.
"The NOC wants to buy the Total part," one source from the leadership of Libya's internationally recognized government, the Presidency Council (PC), said.
He added that officials were examining the value of the 16.33% Waha share with a view to possibly raising funds for a counter offer with money from Libya's $67 billion sovereign wealth fund, the Libyan Investment Authority (LIA).
"They think of the LIA as a potential financier ... LIA is exploring it, the process is just starting," the source said
Libya had not given the required formal approval to the Total-Marathon deal, meaning it could be blocked, the source added.
NOC confirmed in a statement on April 23 that it was "discussing arrangements" over Marathon's "planned sale" with the PC. "Any transaction of this nature must have the approval of NOC and the Libyan authorities," it said in a statement.
The LIA did not immediately provide a response.
Total CEO Patrick Pouyanne told reporters at an industry event in Paris on April 19 that the deal was all but settled.
"The transaction is closed," Pouyanne said. "There are some discussions on some fiscal issues with the government, but it will be done."
A spokeswoman for Marathon Oil said the company had already received payment for the sale of its share.
A Libyan oil source, speaking on condition of anonymity, said that at least some within the NOC found the price Total was paying too low.
The deal was "still under consideration and negotiations between many parties here in Tripoli," a second oil Libyan oil source said.
NOC holds a 59.18% stake in Waha Oil Co. Other stakeholders are ConocoPhillips Co. (NYSE: COP) with 16.33% and Hess Corp. (NYSE: HES) with 8.16%.
Exploration Potential
Waha's output of 300,000 barrels of oil equivalent per day (boe/d) is expected to rise to 400,000 boe/d by the end of the decade, according to production figures given by Total when it announced the deal in early March.
Total said the deal would give it access to reserves and resources in excess of 500 million boe, with immediate production of around 50,000 boe/d and "significant exploration potential" in concessions in the Sirte Basin.
The stake carries production risks—a Waha pipeline has been hit twice in the past four months by suspected attacks, most recently on April 21.
But it also gives Total a presence at fields in eastern Libya, where most of the country's oil resources lie. Total already had stakes in the giant southwestern Sharara Field, and the offshore Al Jurf Field along the Tunisian border.
Libya has been split between rival military factions and governments based in the west and east of the country since 2014. The eastern-based Libyan National Army (LNA) has allowed the NOC in Tripoli to operate facilities on LNA territory, while opposing the internationally recognized government in the capital.
The Waha concessions, granted decades ago, are governed by a law that stipulates that Libya's oil ministry must approve the deal, the Presidency Council source said.
Since the oil ministry is not currently operational, that power falls to the Presidency Council, he said, though the NOC has previously disputed the Council's attempts to take over oil ministry powers.
Any acquisition should deliver the "best possible outcome for all the Libyan people, taking into account Libya's security situation, fiscal position and external investment requirements", the NOC said.
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