The Issue
Tripoli wants more foreign investment to boost oil and gas output to 2 million barrels per day and 4 billion cubic feet per day, respectively, over the next three to five years. IOCs want access to low-cost acreage with existing export infrastructure on Europe’s doorstep, where they believe technology can produce more hydrocarbons from existing fields and fine-tune exploration efforts. But looming in the background is the ever-present threat of prolonged production shutdowns and significant security risk to both assets and staff. In politically fractious Libya, IOCs need to negotiate with Tripoli while avoiding falling afoul of militias, mercenaries and eastern warlords.
IOC Hydrocarbon Scramble
More than 30 IOCs and state oil firms are planning to bid for 22 onshore and offshore blocks on offer, says Libya’s National Oil Corp. (NOC), with bids due by November. US supermajors Exxon Mobil and Chevron are both prequalified along with Shell and existing Euromajor investors Eni, TotalEnergies, BP and Repsol, among others.
Libya remains attractive for its low extraction costs, abundant reserves and existing export infrastructure, but this time around, oil majors believe that advances with artificial intelligence applied to legacy seismic mean much more can be extracted from this well-known hydrocarbons province. Indeed, oil major interest extends to areas outside the auction. Exxon signed a bilateral deal this month with NOC to explore four blocks offshore on the northwestern coast and eastern Sirte Basin. BP's broad deal seeks redevelopment opportunities in the mature giant Sarir and Messla oil fields onshore in the east, along with unconventional oil and gas potential. The UK major will reopen its office in Tripoli by the year's end. Shell also signed an agreement to develop the Al-Atshan oil field located between the southern Murzuq and Ghadames Basins.
