The price of unity in Libya’s oil fields

Libya’s decision to reopen its upstream oil sector to international investors after nearly two decades is beginning to deliver tangible results, with global energy majors moving quickly to secure new projects in Africa’s largest holder of proven crude reserves.

What began in February 2026 with the country’s first competitive licensing round since 2007 has evolved into a broader diplomatic and commercial race. Over the past months, Libya’s National Oil Corporation (NOC) and the Ministry of Oil and Gas have held a succession of meetings with executives from Chevron, TotalEnergies, Shell and ConocoPhillips, as reported by Libya Herald, to define investment plans, field development and production targets, while additional international companies have entered the country’s energy landscape following the award of new exploration blocks. The reopening of Libya’s oil sector has attracted companies from Europe, North America, the Middle East and Africa. Alongside Chevron and ConocoPhillips, successful bidders or pre-qualified participants include Italy’s ENI, France’s TotalEnergies, QatarEnergy, Spain’s Repsol, BP, ExxonMobil and other regional operators, underlining the renewed international competition for access to Libyan reserves.

Chevron has become the clearest symbol of the new phase. In August the company signed a Production Sharing Agreement with Libya’s NOC, which explicitly described the deal as part of the implementation of the 2025 licensing round. ConocoPhillips, as reported by Libya Observer, meanwhile, has been discussing development plans with Libyan authorities, while TotalEnergies and Shell have separately explored ways to expand production and investment in the country.

The rapid succession of commercial agreements has coincided with an increasingly assertive diplomatic role by the United States, which in recent months has intensified efforts to reduce Libya’s political fragmentation and encourage cooperation between the rival institutions that have divided the country since 2014. Washington has placed particular emphasis on the governance of Libya’s financial institutions and the management of the energy sector, arguing that a more unified framework is essential to prevent recurring disputes over oil revenues from disrupting production.Rather than prioritising a rapid return to national elections, Washington’s recent engagement has largely focused on preserving stability by working with Libya’s existing power centres, according to diplomats and regional analysts. U.S. officials have concentrated efforts on facilitating understandings between eastern military commander Khalifa Haftar and the western-based Government of National Unity led by Prime Minister Abdulhamid Dbeibah, particularly over the management of oil revenues, financial institutions and security arrangements. The approach reflects a pragmatic shift away from the U.N.-backed emphasis on elections and democratic transition towards a model that accepts Libya’s entrenched political actors as the country’s principal interlocutors. Supporters of the strategy counter that establishing a minimum level of institutional stability is a prerequisite for any future political process.

The timing is notable. As Washington has stepped up political engagement, American energy companies have simultaneously become some of the first international firms to convert Libya’s licensing round into concrete commercial projects. Chevron has secured its first production-sharing agreement, while ConocoPhillips is advancing discussions over future development plans. Earlier this year, Libya also signed a 25-year agreement involving TotalEnergies and ConocoPhillips through Waha Oil Company, a project valued at more than $20 billion and designed to significantly increase production capacity.

For sure political stability remains the single most important factor determining whether Libya can attract the tens of billions of dollars needed to modernize its ageing oil infrastructure. Without predictable institutions, international companies face uncertainty over contracts, financing and the security of operations. According to Financial Times, Libya’s National Oil Corporation estimates that between $30 billion and $40 billion of new investment will be needed to raise production from around 1.4 million barrels per day to 2 million barrels per day by 2030, while more than 60 discovered oil and gas fields remain undeveloped. Recent drone attacks on energy infrastructure have also highlighted the security risks that continue to concern foreign investors.

Against that backdrop, Washington’s diplomatic activism increasingly overlaps with the commercial interests of its own energy sector. A more stable Libya would not only reduce the risk of renewed production shutdowns but also provide greater contractual certainty for U.S. companies that are expanding their presence in the country. 

That does not mean American interests are alone. Italy remains one of Libya’s most influential energy partners through ENI, whose relationship with the country predates the current licensing round by decades. Thanks to its longstanding presence and existing production assets, the Italian company enters the new investment cycle from a position of relative advantage compared with many competitors arriving through the latest bidding process. France’s TotalEnergies, Britain’s Shell and BP, Spain’s Repsol, QatarEnergy and several other international operators are likewise positioning themselves to benefit from Libya’s renewed opening, turning the country into one of the world’s most closely watched frontier energy markets.

Yet the renewed influx of foreign capital has also revived long-standing concerns over who ultimately benefits from Libya’s vast oil wealth. Unless accompanied by broader political reforms, the recovery of the hydrocarbon sector could reinforce existing institutional divisions by increasing competition over oil revenues between rival authorities. Analysts argue that the growing presence of international companies risks deepening foreign influence over Libya’s strategic resources. 

For ordinary Libyans, the new wave of investment has so far produced little visible improvement. Despite billions of dollars in agreements and ambitious production targets, much of the population continues to struggle with inflation, weak public services, electricity shortages and declining purchasing power, highlighting the persistent disconnect between Libya’s resource wealth and everyday living conditions. 

The reopening of Libya’s licensing process has therefore become more than an energy story. It has evolved into a test of whether political reconciliation, encouraged by international diplomacy and driven by the prospect of major foreign investment, can provide the stability needed for one of the world’s richest oil provinces to realize its potential, or whether the competition for its vast resources will continue to outpace efforts to reunify the country.

Whether by coincidence or design, the United States’ most intense diplomatic engagement in Libya in years has coincided with the return of American oil companies to one of the world’s richest hydrocarbon provinces. The emerging strategy appears to favour stability through deals with the country’s entrenched power brokers rather than a rapid push towards elections, an approach that may reassure investors but leaves unanswered questions about Libya’s long-promised democratic transition.