Libya needs up to $40 billion to develop its oil and gas sector

Libya, home to Africa's largest proven oil reserves, requires up to $40 billion in investment to expand its oil and gas sector and become a dependable global supplier, according to Masoud Suleman, chairman of the National Oil Corporation (NOC). Speaking to the Financial Times, Suleman emphasized the need for significant funds, ranging from $30 billion to $40 billion, to develop over 60 untapped oil and gas fields discovered off the Libyan coast.

The country has faced numerous challenges since the 2011 overthrow of former leader Muammar Qaddafi, including political instability, violence, and unrest, which have largely kept most of its oil production offline. Libya operates under two governments, one in Tripoli and another in Benghazi, with multiple armed groups exerting influence, deterring investors from pouring money into the country.

Major oilfields and export terminals are concentrated in regions controlled by Khalifa Haftar, a military commander and politician ruling the eastern part of the nation. The UN-recognized Government of National Unity in Tripoli is backed by a mix of armed groups. Attacks on critical infrastructure, such as the Zawiya Refinery complex and the South Zawiya power substation, have caused fires, power outages, and disrupted operations.

However, Suleman stated that these security issues were confined to specific areas and were being addressed by the state. Libya has initiated efforts to revitalize its hydrocarbon sector by awarding oil and gas exploration blocks to foreign energy companies like Chevron, Eni, QatarEnergy, and Repsol. In February, the NOC announced the winners of its first bidding round since 2007, allocating concessions across onshore Sirte and Murzuq basins and offshore gasfields in the Mediterranean.

The NOC is considering a return to concession-style agreements, where investors bear more upfront costs, due to the challenges posed by delayed government funding. Recently, the NOC signed an agreement for Area 47 with Qatar-based UCC Holding, led by the Syrian-Qatari billionaire Al-Khayyat brothers, bypassing a competitive licensing round. The NOC's share of production will increase after a decade under this agreement.