Libya’s National Oil Corp (NOC) announced on Monday that agreements have been reached with oil majors BP and Shell.
These agreements involve conducting studies for hydrocarbon exploration and development across three Libyan oilfields.
Since Muammar Gaddafi’s overthrow in 2011, Libya has been in a state of chaos, making foreign investors hesitant to invest in the country.
Despite this, oil giants such as Eni, OMV, BP, and Repsol restarted exploration activities in Libya last year, after a ten-year hiatus.
NOC announced Monday that BP plans to reopen its Tripoli office in the final quarter of 2025.
Libya’s struggles
Libya, a prominent North African nation, holds the significant position of being Africa’s second-largest oil producer.
As a vital member of the Organization of the Petroleum Exporting Countries (OPEC), its oil output plays a crucial role in global energy markets.
However, despite its substantial oil reserves and production capabilities, Libya’s oil sector has been plagued by persistent disruptions.
These disruptions are primarily a consequence of internal conflicts and political instability, particularly the intense disputes between various armed rival factions.
These factions, often vying for control and influence, frequently clash over the equitable distribution and allocation of oil revenues.
The lucrative nature of oil exports makes control over these resources a primary objective for many groups, leading to power struggles and territorial disputes.
The direct impact of these conflicts on the oil industry is severe: they have repeatedly led to the shutdown of critical oilfields, export terminals, and pipelines.
These shutdowns can be sudden and prolonged, drastically reducing the country’s oil output and affecting global oil supply.
The financial implications of these disruptions not only hinder Libya’s ability to capitalise on its most valuable natural resource, but they also severely impact the national economy, which is heavily reliant on oil revenues for public services, infrastructure, and overall development.
MoU with BP
NOC also said it has signed a memorandum of understanding with UK-based BP.
The agreement outlines studies to evaluate the potential for hydrocarbon exploration and production in the Messla and Sarir oilfields, as well as adjacent exploration territories.
BP also plans to explore the country’s wider “unconventional” oil and gas resources. This involves extracting hydrocarbons from porous rock formations using specialized technologies like fracking.
In 2007, the British oil major re-entered Libya, securing an exploration and production sharing agreement with NOC for onshore exploration areas A and B, and offshore area C.
However, this agreement was subsequently suspended due to a force majeure.
Onshore exploration activities resumed in 2023, following the formal lifting of the force majeure.
This came after Eni acquired a 42.5% operating stake in the agreement in 2022, with BP also holding 42.5% and the Libyan Investment Authority retaining 15%.
Agreement with Shell
The state oil firm announced a separate agreement with Shell. This agreement involves evaluating hydrocarbon prospects and conducting a comprehensive technical and economic feasibility study.
The study will be conducted to develop the al-Atshan field and other fields fully owned by the NOC, excluding any areas where third parties, other than the NOC and Shell, have rights.
The study aims to fully develop the Atshan oilfield and other fields solely owned by NOC.
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