U.S. and European oil and gas majors are back to doing business in Libya, a decade after pulling out as civil war engulfed one of the top oil producers and the biggest oil resource holder in Africa.
Amid a relatively calm security situation this year, Libya launched its first bid round for oil and gas exploration in 18 years.
The previous such bid round was held in 2007, four years before the toppling of Muammar Ghaddafi in 2011, which led to a protracted civil war in the country with various factions and tribal interests vying for control of key institutions and major oilfields.
More than a decade after the ousting of Ghaddafi, Libya remains divided with an UN-recognized government based in Tripoli and forces loyal to strongman Khalifa Haftar in the east, where several of Libya’s key oil-producing fields and export terminals are located. Haftar and his Libyan National Army (LNA) have long been backed by Russia, which shifted focus to Libya after the toppling of Bashar al-Assad in Syria at the end of last year.
Senior officials of the Tripoli government visited Washington D.C. last week to boost the strategic U.S.-Libya partnership and bilateral relations. And reportedly, to convince the U.S. that Libya needs its help to reduce Russian influence and become a reliable energy partner for Western companies, including the U.S. supermajors ExxonMobil and Chevron.
Big Oil Lines Up for Big Contracts in Libya
Exxon, Chevron, and the top European oil and gas majors have recently signed deals with Libya to return to exploration and production in the country. Big Oil is also bidding in Libya’s first exploration bid round in 18 years.
Libya is offering a total of 22 blocks for exploration and development, 11 offshore and 11 onshore blocks, which are believed to hold huge untapped resources. The acreage up for grabs is close to existing infrastructure, which would enable cost-effective exploration and development, and efficient production for global markets, Libya says.
The country has also introduced new, more attractive fiscal conditions for the production sharing agreements it will offer to the successful bidders.
Libya’s crude oil production currently exceeds 1.4 million barrels per day (bpd), the National Oil Corporation (NOC) says.
The corporation looks to boost oil production to 2 million bpd within the next three years, “contingent on sufficient funding.”
The landmark bid round is now in its final stages, and the international majors, including Chevron, Eni, Repsol, Shell, and TotalEnergies, are all pre-qualified to bid in the exploration tender.
Foreign majors have recently made steps to return to operations in Libya.
BP and Eni, for example, returned to Libya last year after a decade of avoiding the country amid its civil war.
Per a statement by the NOC of Libya, Italy’s Eni resumed exploratory drilling in the Ghadames Basin in October 2024. The company operates the exploration block where it is drilling in partnership with BP and the Libyan Investment Authority—the country’s sovereign wealth fund.
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This year, NOC signed agreements with BP and Shell to explore and evaluate the oil and gas potential of several fields. BP will conduct studies to assess the potential for exploration and production in the Messla and Sarir fields, as well as in some surrounding exploration areas. Shell, for its part, will evaluate prospects and conduct a comprehensive technical and economic feasibility study to develop the al-Atshan field and other fields fully owned by the NOC.
Exxon also signed a preliminary deal for exploration at four offshore blocks in Libya. At the signing of the agreement, NOC said that “It is worth noting that ExxonMobil was one of the companies that expressed interest in participating in the public bidding round initiated by the NOC for exploration in Libya, which includes 22 offshore and onshore blocks available for investment.”
Chevron is also considering opportunities in Libya, chief executive Mike Wirth said on the supermajor’s investor day earlier this month.
“The thing that is interesting today is, there are a number of opportunities out there in terms of new country entries. We’ve had discussions underway that have been reported in the media, so I can acknowledge these in Libya,” Wirth told analysts.
Libya Looks to Advance Strategic Partnership with U.S.
Simultaneously with the first bid round in nearly two decades, Libya is pitching its oil industry to the U.S. as an alternative to Russian oil and solving the problem with Haftar’s army controlling areas in the country containing critical reserves and infrastructure, Libyan officials told the Financial Times during last week’s visit to Washington.
“We have a problem,” senior Libyan official Mahmoud Ahmed Alfiste told FT, noting that while NOC is recognized as the only legitimate entity as a custodian of Libya’s production and exports, “Haftar and his sons are controlling” areas with some critical reserves.
Libya’s Finance Minister, Khaled Al-Mabrouk, who was part of the delegation on the visit to the U.S., said, “We look forward to substantial and sustained dialogue with our U.S. partners to invest in Libya’s transformation and to join in supporting a unified, stable Libya that benefits both countries’ strategic interests and the stability and growth of the wider region.”
The return of Big Oil to Libya suggests international majors believe in Libya’s potential and could be the first step toward the economic revival in the North African oil producer and exporter.
By Tsvetana Paraskova for Oilprice.com
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