* Foreign investors concerned about post-Gaddafi turmoil
* Minister confirms Marathon to stay
* Says South Africa, Brazil interested in developing ties
By Ulf Laessing
TRIPOLI, Oct 26 (Reuters) - U.S. firm Marathon Oil will continue operating in Libya after giving up plans to sellits stake in Waha Oil Company, Oil Minister Abdelbari Arusi saidon Saturday.
Two years of turmoil after the overthrow of leader MuammarGaddafi, as well as tough contract terms, have prompted oilcompanies to reassess their role in the North African country,but the government has been keen to keep them.
Sources told Reuters this week that Marathon was blockedfrom selling its stake in Waha by the government which has firstrefusal on such a deal. A source said the state-owned NationalOil Corp (NOC) was likely to offer Marathon below market valuefor the stake.
"They are staying here," Arusi told reporters. "They told usthey will continue with us."
Marathon was not immediately available for comment.
Arusi also told reporters that Libya was considering buyinggas from neighbouring Algeria as it faces power cuts during peakdemand, and said South Africa wanted to buy oil from Libya.
"We discussed that (South Africa) will buy some oil fromLibya based on world market prices," Arushi said after meetingOhm Collins Shabane, minister in the South African presidency.
Both sides were also discussing working together on gasproduction in the Brega area, a coastal zone where Libya's stateindustry is producing gas.
Shabane confirmed the two countries want to boost oil andother economic cooperation. "We are exploring possibilities interms of... increasing our capacity to trade," he said, withoutgiving details.
Arushi also said Brazil's Petrobas had written aletter to the oil ministry expressing its interest to continuetheir operations in Libya. The company, in Libya since 2005,operates an exploratory offshore block.
Arusi also said state-owned Sirte Oil Co was producingbetween 60,000 barrels a day and 80,000 bpd at Brega, dismissingreports of production cuts due to power cuts as "talk."
Trading and local Libyan sources told Reuters on ThursdayLibya did not plan to export crude oil from Brega port inNovember, the only oil terminal still functioning in the east,after a fall in production.
A mix of striking workers, militias and political activistshave blocked several of Libya's major oil terminals for aboutthree months, resulting in billions of dollars of lost revenuesfor the government and foreign oil companies operating there.
Marathon and ConocoPhillips each hold a 16.3 percentinterest in the Waha concessions, Hess Corp. holds an8.2 percent interest and Libya's NOC 59.2 percent.
Marathon's exit would have followed that of ExxonMobil, which said last month the security situation no longerjustified a big presence, and Royal Dutch Shell, whichlast year abandoned two blocks after disappointing results.
- Politics & Government
- Unrest, Conflicts & War
- Marathon Oil
- Waha Oil Company
- South Africa