After years of political instability and conflict, Libya is emerging as a key player in the global energy market. It has ambitious plans to revitalize its oil and gas sectors and a growing interest in renewable energy. As the home of Africa’s largest oil reserves and a significant contributor to its GDP and government revenue, Libya’s focus on its energy sector is a matter of international interest.
Libya’s economy is deeply intertwined with its energy sector, primarily oil and natural gas exports. The country boasts the largest oil reserves in Africa and is a vital exporter, particularly to European markets. As a member of Organisation of the Petroleum Exporting Countries (OPEC), its oil reserves stand at over 48.4 billion barrels, accompanied by substantial natural gas reserves estimated at 53 trillion cubic feet. However, the journey has been tumultuous.
The discovery of significant reserves in the 1950s was a high point, but political upheaval and infrastructure challenges have led to fluctuating production levels. From a peak of over 3 million barrels per day (bpd) in the 1970s, production plummeted to around 465,000 bpd in 2011. Now, Libya’s state oil company, National Oil Corporation (NOC), is actively negotiating to reopen key oil fields and terminals.
Libya is setting its sights high with plans to increase oil production from the current level of 1.2 million bpd to 2 million bpd within the next two to five years. This ambitious target involves modernizing operations across the oil and gas industry’s spectrum. The NOC’s recent announcement of two bidding rounds in 2024 reflects this goal, focusing on increasing oil production, establishing a natural gas liquefaction plant, and developing a gas pipeline to Egypt.
Libya’s energy sector witnessed major agreements and initiatives in 2023, marking a pivotal year for oil, gas, and renewable energy projects:
In January, a landmark $8 billion deal was struck with Italian energy company Eni to boost gas production for domestic supply and European exports.
The NOC awarded a contract to US firm Honeywell-UOP to build a 30,000-bpd refinery in March.
In July, Libya’s National Drilling Company, a NOC subsidiary, partnered with US-based SLB to drill new wells in Nesr and Al Waha fields.
An agreement with Equinor in October explored Libya’s offshore potential, aiming to develop new wells and production sites.
Major energy firms like TotalEnergies, OMV, Sonatrach, BP, and Eni resumed operations in various Libyan fields.
In November, Italian firm Rosetti secured a $300 million contract for a large-scale gas production project offshore Libya.
Complementing its fossil fuel endeavors, Libya is also venturing into renewable energy. With a strategic geographical position conducive to solar and wind energy, the country aims for a 20% renewable contribution to its energy mix by 2035. A significant collaboration with TotalEnergies to develop 500 megawatts of solar PV projects highlights this new focus.
Libya is actively seeking foreign investment to unlock its energy sector’s potential, with a special emphasis on Turkish participation. The Libyan Petroleum and Natural Gas Minister has expressed an intention to prioritise Turkish expertise in seismic research and drilling operations, reflecting the deepening of Turkish-Libyan energy cooperation.
Libya’s commitment to its energy sector is further underscored by its organisation of the Libya Energy and Economy Summit in Tripoli. This event, poised as a global platform, aims to attract international investment and discuss strategies for the country’s energy future.