TOTAL and Repsol, the European energy groups, have found more oil in Libya, underscoring the country’s abundant fossil fuel wealth.

The two oil companies said yesterday that the J-1 well in the Murzuq Basin, in the Sahara Desert, had flowed at 4,650 barrels per day (bpd) after encountering “a significant oil column”.

The successful J-1 well is the oil companies’ sixth discovery in the area, 500 miles (800km) south of Tripoli, the Libyan capital, and followed last month’s I-1 discovery. The I-1 well flowed at 2,000 bpd. Total and Repsol’s other partners in the block are OMV, the Austrian group, Norsk Hydro, of Norway, and the Libyan National Oil Company.

The drilling success in Libya comes as Petrofac, the oil and gas services contractor based in Aberdeen, announced the award of a $1 billion (£570 million) three-year job in oil-rich Oman.

Petrofac, which listed on the London Stock Exchange last month, said that the contract would involve building a new oil and gas processing station within the Harweel Cluster development in southern Oman. Petrofac’s shares firmed 11p to 227p.

Libya’s oil and gas resources have long caught the eye of the world’s leading energy companies, although most were powerless to act until the lifting of international sanctions two years ago. The economic sanctions had been imposed after Libya stood accused of bombing Pan Am Flight 103 over Lockerbie, Scotland, in 1988. Total, Repsol and OMV operated in Libya when the sanctions were in place.

Libya is thought to have proven oil reserves of 39 billion barrels, the ninth-biggest oil reserves in the world.

Experts believe that large parts of the country remain underexplored and offer significant potential for discoveries.

Libya has already announced ambitious $30 billion plans to raise oil production, which was 1.6 million bpd last year. Tripoli wants production to reach two million bpd by 2010 and three million bpd by 2015 and has been looking to foreign companies to assist investment.

The world’s oil groups are struggling to replenish their reserves and are drawn to Libya’s fossil fuel riches, despite its onerous conditions. Last month several European and Asian oil groups picked up new exploration acreage in Libya after fiercely contested bidding.

Successful bidders included BG Group, the FTSE 100 company, Eni, of Italy, Total and Statoil, of Norway. BP and Royal Dutch Shell failed to win new blocks because they were not competitive enough in a contest in which the rates of return were as low as 6.8 per cent and signature bonuses exceeded $10 million.

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