Pumping Up Profits

A dozen sheep were ceremonially slaughtered, the tanker British Confidence blasted a salute, and Libya's 76-year-old King Idris last week officially opened his country's newest oil port at Marsa Hariga, two miles from Tobruk. To mark the occasion, the desert monarch was handed a $5,000 gold key by Texas' Nelson Bunker Hunt, 40, second son of H. L. Hunt and half owner of the oil company that made the Marsa Hariga facilities possible. The other 50% interest is held by British Petroleum Co., and the firm is named -- logically, if not lyrically-- BP Bunker Hunt.

Now pumping a modest 100,000 bbl. a day, BP Bunker Hunt ranks fifth among the majors operating in Libya. But it has enormous potential, because of its concessions in the huge Sarir field. To exploit its holding, BP Bunker Hunt has built a capacious crude-oil pipeline leading from its rigs in the Sarir to Marsa Hariga. Running 320 miles, the 34-in., multimillion-dollar line could ultimately carry almost 1,000,000 bbl. at a clip. It is buried six feet beneath the dunes in order to keep the oil liquid during the chill desert nights. The pipeline runs past a British airbase-- and deliberately close to the Egyptian border. If necessary, British soldiers will thus be better able to guard against sabotage.

Desert Drilling. For all its possibilities, the BP Bunker Hunt enterprise is only an indication of the interest that major oil companies now have in Libya. A mere five years ago, Libya ranked virtually nowhere among the oil-producing nations of the world. Today it stands seventh, behind the U.S., U.S.S.R., Venezuela, Saudi Arabia, Kuwait and Iran. Thirty-nine companies have drilling operations in the Libyan desert. The biggest producer is a consortium, Oasis Oil Co. of Libya, Inc., comprising Continental, Marathon and Amerada-Shell. Also on the scene are Esso, Mobil/ Gelsenberg (75% Mobil-owned) and Amoseas, a joint exploration venture of Texaco and Standard of California. Together, these giants pump more than 1.7 million bbl. a day.

Even though some Libyan crude is waxy and tends to solidify at European winter temperatures, Europe is the major market. Although production costs are higher than those in the Middle East, low transportation charges more than offset the difference.

Inevitably, the Libyan government has notions of gaining a greater share of the profits from its under-the-dunes fortune. Already approved by the Libyan legislature is a measure allowing the country to increase its oil revenues by decreeing what price the oil companies must charge. But the law has not yet been enforced, and it is unlikely that it will be in the foreseeable future. After all, oil income has more than tripled Libya's per-capita annual income in the past five years, and much of the money has been spent or earmarked for housing, hospitals, schools and public utilities hitherto unknown in the Libyan desert economy.

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