popular articles

Libyan Oil Concessions and the Struggle for Contractual Fairness

The complex dynamics between Libya, international oil companies and contractual challenges in the country's oil industry.

Please share:

Since the fall of Muammar Gaddafi in 2011, oil-rich Libya has faced unprecedented challenges in its vital energy sector. Libya’s Minister of Oil and Gas, Mohamed Oun, in an interview with S&P Global Commodity Insights, accused some international oil companies (IOCs) of exploiting the precarious security situation and neglecting their development plans.

Accusations against International Oil Companies

These IOCs, having promised to undertake specific projects, have been lax in fulfilling their commitments, particularly with regard to exploration and seismic surveys. This situation has exacerbated the difficulties of the Libyan oil sector, which is struggling to regain its production capacity of 1.6 million barrels per day (b/d), a level it has not reached since 2011.
The summer of 2022 saw oil production fall to a two-year low of 650,000 b/d, although it has since recovered slightly. Libya, which is exempt from OPEC+ quotas, is striving to maintain production at around 1.2 million b/d. Oun stresses that IOCs who fail to meet their commitments should relinquish their concessions and hand them over to other companies.

Renegotiation of Contract Terms by TotalEnergies and ConocoPhillips

At the same time, it criticizes attempts by the ICCs, notably TotalEnergies and ConocoPhillips, to renegotiate contractual terms to increase their share of costs paid to Libya’s National Oil Corporation (NOC). This move, according to Oun, is all the more surprising given that these companies have the capacity to significantly increase their production.

The Impact of the Eni-NOC Agreement on Contractual Dynamics

The situation is further complicated by the agreement signed between Eni and the NOC to develop the A&E Offshore Structures, which, according to Oun, breaches several laws by increasing the share paid by Eni. This negotiation paved the way for other ICCs to request similar contractual modifications.
Despite these tensions, Libya plans to launch a new licensing round in 2024 to stimulate oil and gas exploration. The country, sitting on Africa’s largest oil reserves, aims to increase its oil production to 2 million b/d over the next three to five years. At the same time, gas production, currently at around 2.6 billion cubic feet per day, could be increased by tapping additional reserves.

The oil situation in Libya is marked by contractual and security challenges. Despite this, the country aspires to revitalize its oil and gas industry, by strengthening existing partnerships and attracting new investment.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Commercial crude oil inventories in the United States rose to their highest level since July 2024, driven by a drop in exports and lower refining activity.
Saudi Aramco is considering new investments in Indian refinery projects after previous failures, as the country boosts refining capacity to meet rising domestic demand.
Saudi Aramco is considering new investments in Indian refinery projects after previous failures, as the country boosts refining capacity to meet rising domestic demand.
The Nigerian president has replaced the leadership of the Nigerian National Petroleum Company amid declining output and eroding investor confidence.
The Nigerian president has replaced the leadership of the Nigerian National Petroleum Company amid declining output and eroding investor confidence.
Sinopec has identified over 140 mn tonnes of proven reserves in the Jiyang Basin, marking the largest certified shale oil discovery in China.
Sinopec has identified over 140 mn tonnes of proven reserves in the Jiyang Basin, marking the largest certified shale oil discovery in China.
Boaz Energy II has completed the sale of its oil properties and trust units to T2S Permian Acquisition II, refocusing its operations while maintaining administrative continuity of the PermRock Royalty Trust.
Offshore oil group Awilco Drilling PLC enters ex-dividend period on 1 April, marking the detachment of a USD 2.06 per share payment, amid significant cash returns to shareholders.
Offshore oil group Awilco Drilling PLC enters ex-dividend period on 1 April, marking the detachment of a USD 2.06 per share payment, amid significant cash returns to shareholders.
After several years of negotiations, Uganda officially signs an agreement to establish the Hoima oil refinery, a central project in the country's energy strategy aimed at reducing dependency on fuel imports.
After several years of negotiations, Uganda officially signs an agreement to establish the Hoima oil refinery, a central project in the country's energy strategy aimed at reducing dependency on fuel imports.
The Nigerian national oil company, NNPC, is finalizing the last steps toward its highly anticipated stock market listing, mobilizing investors and financial institutions for what promises to be a pivotal moment in Africa’s energy market.
The Nigerian national oil company, NNPC, is finalizing the last steps toward its highly anticipated stock market listing, mobilizing investors and financial institutions for what promises to be a pivotal moment in Africa’s energy market.
Repsol’s Chief Executive said the company is exploring options with US authorities to remain active in Venezuela following Washington’s decision to end sanctions waivers.
CNOOC Limited has announced the discovery of the Huizhou 19-6 oilfield in the eastern South China Sea, with proven reserves exceeding 100 million tonnes of oil equivalent.
CNOOC Limited has announced the discovery of the Huizhou 19-6 oilfield in the eastern South China Sea, with proven reserves exceeding 100 million tonnes of oil equivalent.
PetroChina posts record net profit in 2024, driven by rising oil and gas volumes and expanded refining and distribution operations.
PetroChina posts record net profit in 2024, driven by rising oil and gas volumes and expanded refining and distribution operations.
EACOP has confirmed the closure of an initial tranche of external financing for its 1,443 km pipeline, as several NGOs urge participating banks to withdraw from the project.
EACOP has confirmed the closure of an initial tranche of external financing for its 1,443 km pipeline, as several NGOs urge participating banks to withdraw from the project.
Chinese oil group CNOOC Limited reported higher net profit for 2024, driven by growing reserves, record production and strict cost discipline.
The US Energy Information Administration reported an unexpected decline in crude oil inventories, reversing analysts' forecasts of an increase, with immediate effects on crude prices.
The US Energy Information Administration reported an unexpected decline in crude oil inventories, reversing analysts' forecasts of an increase, with immediate effects on crude prices.
Cut off from Iranian energy imports by Washington, Iraq accelerates commercial efforts in Africa while resuming oil exports through Turkey to quickly secure new economic and energy markets.
Cut off from Iranian energy imports by Washington, Iraq accelerates commercial efforts in Africa while resuming oil exports through Turkey to quickly secure new economic and energy markets.
Drydocks World has secured a contract to extend the operational life of the Baobab MV10 offshore platform in Côte d’Ivoire by 15 years through refurbishment and upgrade works.
Drydocks World has secured a contract to extend the operational life of the Baobab MV10 offshore platform in Côte d’Ivoire by 15 years through refurbishment and upgrade works.
Amid trade tensions with the United States, Canadian Prime Minister Mark Carney is reviving pipeline projects toward the Arctic to directly access European and Asian markets, diversifying Canada's oil exports.
According to Offshore Energies UK, Britain's oil and gas potential in the North Sea is limited by a tax regime that hinders investments needed to boost national production, increasing dependency on imports.
According to Offshore Energies UK, Britain's oil and gas potential in the North Sea is limited by a tax regime that hinders investments needed to boost national production, increasing dependency on imports.
US authorities have extended Chevron’s temporary licence to operate in Venezuela until 27 May, despite Donald Trump’s warnings of tariffs on imports from countries trading with Caracas.
US authorities have extended Chevron’s temporary licence to operate in Venezuela until 27 May, despite Donald Trump’s warnings of tariffs on imports from countries trading with Caracas.
Senator Yannick Jadot appears in court in Paris for defamation after accusing TotalEnergies of being “an accomplice to war crimes” due to its presence in Russia in 2022.
Senator Yannick Jadot appears in court in Paris for defamation after accusing TotalEnergies of being “an accomplice to war crimes” due to its presence in Russia in 2022.
The Equatoguinean government has announced an immediate increase in fuel prices, citing outdated tariffs and budget constraints driven by a prolonged decline in oil exports.
The South African government is intensifying efforts to exploit its vast oil and gas reserves to stimulate national economic growth and boost public revenue.
The South African government is intensifying efforts to exploit its vast oil and gas reserves to stimulate national economic growth and boost public revenue.
A North Dakota jury ordered Greenpeace to pay more than $665 million to Energy Transfer, triggering international reactions denouncing an attack on freedom of expression.
A North Dakota jury ordered Greenpeace to pay more than $665 million to Energy Transfer, triggering international reactions denouncing an attack on freedom of expression.
Ecuador has detected a new oil spill in a pipeline located in the Amazonian province of Napo, near its main hydroelectric plant, raising concerns over the country’s energy supply.
Ecuador has detected a new oil spill in a pipeline located in the Amazonian province of Napo, near its main hydroelectric plant, raising concerns over the country’s energy supply.

Advertising