Summary:

On 26 October 2024, the Libyan National Oil Corporation (NOC) announced that foreign energy companies are resuming exploration in the country after more than ten years since onshore drilling operations were halted due to the 2014 civil war.

These companies include Italy’s Eni and British Petroleum (BP) in the Ghedames Basin, Spain’s Respol in the Murzuq Basin and Austria’s OMV in the Sirte Basin.

The NOC had previously announced on 22 October that it aimed to increase oil production by developing drilling operations and the maintenance of oil wells.

It also stated that it is working on lifting technical obstacles to achieve the goal of producing more than the current 1.3 million barrels per day following the resolution of the Central Bank (CBL) crisis.

These announcements come a few days after Tripoli’s Oil Ministry denied rumors about the resignation of the NOC’s head, Farhat Bengdara. Bengdara is considered by many to be a compromise candidate that was appointed chairman of the board of the Libyan NOC in July 2022 after a deal between the country’s two rival governments, that of Abdelhamid Dbeibah representing the western government, and General Khalifa Haftar in the east.

Outlook: 

The start of new drilling operations by foreign companies following the resolution of the conflict over control of the CBL reflects the importance of Libyan oil for international companies and the global oil market.

The NOC has increased announcements that are likely intended to restore the confidence of international investors and diplomatic actors in Libyan oil production as this energy sector has been the main asset permitting the two rival governments to continue operating. The new operations highlight Western energy companies’ influence in Libya as they are managing to secure a significant part in the Libyan energy market despite a persistent Russian presence in the country.

With the affirmation that Farhat Bengdara is set to continue to manage the NOC, it is likely that the tacit agreement to share and divert oil revenues by the two governments will persist as it was in place before the ousting of the Central Bank former governor, Sadik El-Kebir.

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