Libya seeks up to $40bn to revive oil and gas sector

Libya is seeking up to $40 billion in investment to unlock its undeveloped oil and gas resources and raise production, as political instability and security concerns continue to deter investors.

National Oil Corporation (NOC) chairman Masoud Suleman stated on August 18 that Libya needs between $30 billion and $40 billion to develop its untapped resources, as reported by the Financial Times via The National. More than 60 discovered oil and gasfields have yet to be developed, he said.

Libya currently produces around 1.4 million barrels per day and aims to reach 2 million bpd by the end of the decade. The country holds Africa’s largest proven oil reserves, but its energy sector has been repeatedly disrupted by political instability and violence since the overthrow of Muammar Gaddafi in 2011.

The country remains divided between rival administrations in Tripoli and Benghazi, while armed groups continue to wield influence. Most of Libya’s largest oilfields and export terminals are in areas controlled by Khalifa Haftar, who has periodically overseen blockades of oilfields and ports.

Security concerns have also recently affected energy infrastructure. Drone attacks on the Zawiya Refinery complex caused fires in several fuel storage tanks, while an attack on the South Zawiya power substation contributed to major power cuts around the city. US company GE suspended work at a nearby power plant and withdrew technical teams over security concerns.

Suleman described the attacks as being confined to a “limited geographical area” and attributed them to a “small number of outlaws”, whom the state was working to “neutralise”. He said investment sites were located beyond areas of tension and were under robust security.

The NOC is seeking to attract more foreign investment after awarding exploration blocks to companies including Chevron, Eni, QatarEnergy and Repsol.

Its first bidding round since 2007, held in February, allocated concessions across the Sirte and Murzuq basins and offshore gasfields in the Mediterranean.

However, under Libya’s existing production-sharing agreements, the NOC must finance its share of development costs. Suleman said a lack of funds was delaying projects and that the corporation was considering changing its model to place more of the upfront financial burden on international investors.

The NOC is examining a return to concession agreements or changes to existing production-sharing terms, he said.

Suleman said the NOC was “suffering from [a] lack of funds”, which was delaying development projects “dramatically”.

Financial Times via The National, Maghrebi.org