While Libya saw a temporary halt in oil production for the first eight months of 2020 due to a blockade against coastal oil export terminals, the country still retains the largest oil deposits in Africa, with more than 48 billion barrels of estimated recoverable reserves. Moreover, Libya produces sweet, high-quality crude that is both relatively easy to extract and sold at a premium, enhanced by the country’s close proximity to Euro- pean markets. While leading operators have exploited the country’s prolific Sirte Basin, the Murzuq, Ghadames, Kufra and Cyrenaica Basins, along with the offshore Gulf of Sirte, have been relatively under-explored and are estimated to hold extensive frontier potential. As a result, Libya offers attractive prospects in both mature and frontier basins, coupled with increasing domestic demand for the consumption of natural gas, petroleum and petroleum by-products.
Prior to the blockade, several IOCs were gearing up to further develop Libya’s substantial oil deposits. In December 2019, Total and Libya’s National Oil Corporation (NOC) signed an agreement that gave the French major a minority stake in Libya’s Waha asset. According to the agreement, Total will help the NOC to develop the North Giaolo and NC 98 fields in the Waha con- cession, increasing production by 180,000 bpd and investing $650 million. In the same month, Russian oil company Tatneft resumed upstream activities in the Ghadames Basin after more than five years of delay. Throughout 2019, BP, Eni and Gazprom announced their intention to resume exploration activities in Libya, while OMV and Repsol planned to increase their upstream presence.
Since the lifting of force majeure in October 2020, additional IOCs have restated their commitments to the country. In August, Shell met with the NOC to discuss resuming exploration in Libya, as well as marketing and refining activities, following the company’s nine-year halt in operations. Meanwhile, Spain’s Repsol announced plans in the same month to resume oil exploration activities and carry out maintenance work on the surface equipment at the El Sharara oilfield – Libya’s largest oilfield that holds three billion barrels of recoverable reserves.
Last month, Libya’s NOC met with Equinor to discuss supporting infrastructure requirements; re- habilitating and putting into production the Mabrouk field; and facilitating the transfer of technical expertise from the Norwegian multinational to Libya’s exploration and production activities. The NOC also met with Eni to extend a deadline regarding an oil project being led by the Italian oil giant that comprises the construction of two new fixed offshore plat- forms opposite the Mellitah com- plex in western Libya, as well as the development of subsea pipe- lines adjacent to an onshore gas treatment facility.
According to statements from the Governor of the Central Bank of Libya, Sadiq Al-Kabir, Libya must raise its oil production by 40% from current levels to meet its expenditures and revamp its economy. The North African nation cur- rently produces 1.3 million bpd, which is expected to generate $25 billion in revenues by the close of 2021. Now, the country is target- ing output levels of 1.8 million bpd by 2022, which is expected to gen- erate $35 billion if barrel prices average around $60. This acceler- ates earlier targets set forth by the Ministry of Oil & Gas that aimed to produce 1.6 million bpd by 2023 and 2.1 million bpd by 2025. In addition to ramping up IOC par- ticipation, several factors will be decisive in achieving aggressive production targets, including sus- tained political cooperation and continued exemption from OPEC- led production quotas.
Libya’s renewable energy potential will be unpacked during a renewable energy panel at the upcoming Libya Energy & Economic Summit 2021, taking place on 22-23 November 2021, in-person in Tripoli and on Zoom for online participants. Energy Capital & Power is honored to work with the Government of National Unity and all industry participants to produce this historic summit.
Companies interested in supporting the event can contact firstname.lastname@example.org for more information. Individuals and organizations that wish to join as speakers or panelists can contact email@example.com and media partners can contact firstname.lastname@example.org. Learn more at www.libyasummit.com.