Opec member Libya on Saturday signed a 25-year oil development agreement with France’s TotalEnergies and ConocoPhillips of the US, involving investments worth more than $20 billion, as the country intensifies efforts to boost oil production.
The deal will be funded through external financing, allowing Libya to add 850,000 barrels per day of additional capacity, with expected net revenues at about $376 billion, Libyan Prime Minister Abdul Hamid Dbeibah said on X.
Officials sealed the agreement during the Libya Energy and Economic Summit in the capital Tripoli. It was signed through Waha Oil Company, a unit of the state-owned National Oil Corporation that operates several oil and gas fields and other assets.
ConocoPhillips and TotalEnergies each have a 20.4 per cent stake in Waha.
The deal reflects “strengthening of its relations with the largest and most influential international partners in the global energy sector, and expanding avenues of co-operation and investment", Mr Dbeibah said, adding it will provide additional resources for the economy, including the creation of new jobs and increasing wages.
Massad Boulos, senior adviser to the US President for Arab World and Middle East Affairs, said at the summit that the deals signed by ConocoPhillips and Chevron make "one thing undeniable, the United States and its world-class companies are betting on Libya's future".
"By opening new opportunities for competitive international investment, Libya is signalling it's ready to play in the big league again," he said.
The government also signed an initial co-operation agreement with Chevron and Egypt’s Ministry of Petroleum.
The North African Country is also in the process of awarding new licences to international oil and gas companies and the results of its first oil exploration bidding round in more than 17 years will be announced on February 11, Masoud Suleman, acting chairman of the National Oil Corporation, said.
Several international oil companies including BP, Chevron, ExxonMobil, TotalEnergies, Eni, Shell and OMV have qualified for the new licensing round that covers 22 areas for oil exploration and development, with 11 blocks offshore and 11 onshore.
Libya produces some of North Africa’s cheapest, largely sweet oil, much of which has remained offline since the 2011 civil war that followed the overthrow of former leader Muammar Qaddafi.
Currently, the country is run by two governments − the UN-backed administration in Tripoli led by Mr Dbeibah and the eastern government supported by military commander Field Marshal Khalifa Haftar.
Europe exports
“Libya recently achieved a milestone for covering cruel production to 1.4 million barrels a day. Now more work and investment is required to not only stabilise that but grow that into the future,” Ryan Lance, chief executive of ConocoPhillips said at the summit.
“The country is well-positioned to deliver oil and gas to Europe and around the world, helping ensure European energy security, as well as global energy security and gas.”
Libyan crude is increasingly important to Europe as it looks to diversify its energy supplies away from Russia, following Moscow's invasion of Ukraine
Its proximity and a pipeline from western Libya to Italy make it an accessible source for Europe.
“Despite many challenges, Libya has managed to increase its oil production…with a strong and pragmatic and realistic ambition to reach 2 million (bpd) by the end of this decade,” Patrick Pouyanne, chief executive of Total Energies said.
However, security concerns persist as Libya has previously shut down oilfields and terminals because of clashes between rival factions.
In 2023, Libya's NOC declared force majeure at Sharara, its biggest oilfield, in the Murzuq Desert, in the west of the country, taking it offline temporarily amid unrest.
