Libya has awarded oil and gas exploration licences to a select group of international companies, marking a tentative revival of foreign investment in a sector battered by more than a decade of political chaos and civil conflict.
Aiteo, Nigeria’s largest privately-held energy company, emerged as a rare African winner in the tender announced on Wednesday, alongside US major Chevron and several European consortia.
The awards represent Libya’s first licensing round since 2007, before the 2011 uprising that toppled Muammar Gaddafi and plunged the North African nation into prolonged instability.
The National Oil Corporation allocated just five of the 20 exploration blocks on offer, underscoring persistent investor wariness despite the country’s vast hydrocarbon reserves. Libya holds Africa’s largest proven oil reserves and has historically been a crucial supplier to European markets.
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“It is likely that lingering uncertainty over Libya’s political dysfunction and insecurity in the areas around the blocks on offer were factors in the underwhelming response,” Hamish Kinnear, an analyst at UK-based risk consultancy Verisk Maplecroft, told AFP
For Aiteo, the Libyan licence represents a significant international expansion beyond its Nigerian heartland, where it operates key oil infrastructure, including the Nembe Creek Trunk Line. The company’s success in securing a foothold in Libya, where established international oil companies have traditionally dominated, signals its growing ambitions across the African energy landscape.
Other successful bidders included a consortium of Spain’s Repsol and BP, Italy’s Eni North Africa partnering with QatarEnergy, and a group comprising Repsol, Hungary’s MOL Group and Türkiye Petrolleri.
The mix of European, Middle Eastern and African interests reflects Libya’s strategic importance at the crossroads of Mediterranean energy flows.
The licensing round employed revamped contractual terms designed to attract investment after years when rigid fiscal frameworks deterred foreign companies. Masoud Suleman, NOC chief, said a committee would be established to “improve the terms” further and negotiate with candidates over unallocated blocks.
Libya’s oil sector remains hobbled by the country’s fractured political landscape. Rival administrations in Tripoli and the eastern city of Benghazi continue to vie for legitimacy, while disputes over central bank control and revenue distribution frequently trigger production shutdowns at critical fields.
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Current output stands at approximately 1.4m barrels per day, well below the pre-2011 levels of 1.6m bpd. Prime Minister Abdulhamid Dbeibah has set an ambitious target of boosting production by 850,000 bpd over the next 25 years.
Wednesday’s announcement follows a $20bn development agreement signed last month with France’s TotalEnergies and US-based ConocoPhillips, suggesting Libya’s internationally recognised government in Tripoli is pursuing a two-pronged strategy of engaging both established producers and new entrants.
Yet security concerns remain paramount. Recent clashes between armed groups and ongoing territorial disputes in oil-rich regions continue to pose risks to foreign personnel and infrastructure. Insurance costs for Libyan operations remain elevated, adding to project economics already challenged by ageing facilities requiring substantial investment.
Energy analysts cautioned that converting exploration licences into producing assets would require sustained political stability, a commodity that has proved elusive in Libya. The country has cycled through multiple governments and ceasefires since 2011, with each promising a return to normalcy.
