Libya’s National Oil Corp. (NOC), announced Monday that it had reached agreements with oil giants BP & Shell.
The agreements include the conduct of hydrocarbon exploration studies and oilfield development in three Libyan oilfields.
Libya is in chaos since Muammar Gadhafi was overthrown in 2011. Foreign investors are reluctant to invest there.
Despite all this, oil companies such as Eni OMV BP and Repsol resumed their exploration in Libya after a ten year hiatus last year.
NOC reported Monday that BP intends to reopen their Tripoli office during the fourth quarter of 2025.
Libyan struggles
Libya is a notable nation in North Africa and the second largest oil producer in Africa.
Oil production plays a key role on the global energy market as a member of the Organization of the Petroleum Exporting Countries.
Libya’s oil industry has suffered from persistent interruptions despite having substantial reserves of oil and the ability to produce it.
The main cause of these disruptions is internal conflict and political instabilities, notably the fierce disputes that exist between rival armed factions.
They often clash, as they vie for influence and control, over an equitable allocation and distribution of oil revenue.
Oil exports are lucrative, and control of these resources is a top priority for many groups. This leads to territorial conflicts and power struggles.
These conflicts have had a severe impact on the oil sector: They’ve repeatedly caused the closure of oilfields and export terminals as well as pipelines.
The shutdowns may be abrupt and long-lasting, causing a drastic reduction in the oil production of a country and impacting global oil supplies.
These disruptions have a severe impact on the economy of Libya, as it is heavily dependent on revenues from oil for its public services, infrastructure and development.
MoU With BP
NOC has also signed a Memorandum of Understanding with UK-based BP.
This agreement details studies that will evaluate hydrocarbon production and exploration potential in Messla oilfields and adjacent exploration areas.
BP plans to also explore “unconventional oil and gas” resources in the country. It involves the extraction of hydrocarbons through porous rock formations, using technologies such as fracking.
The British Oil Major re-entered Libya in 2007, securing a production and exploration sharing agreement with NOC, for the onshore areas A and C, as well as offshore area B.
This agreement has been suspended as a result of unforeseen circumstances.
After the lifting of force majeure, onshore exploration will resume in 2023.
Eni had acquired a 42.5% stake operating in the deal in 2022. BP held 42.5%, and the Libyan Investment Authority retained 15%.
Shell and Shell
Shell and the state-owned oil company announced an agreement separate. The agreement includes evaluating hydrocarbon prospect and conducting an extensive technical and economic feasibility analysis.
This study is to be carried out in order to develop al-Atshan and all other NOC-owned fields, except for any other areas that are owned by third parties.
This study will help NOC develop Atshan and all other oilfields that it owns.
As new information becomes available, this post BP and Shell to return to Libya in order for them explore hydrocarbons at three sites may be updated.
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