Foreign investors are showing interest in Libya’s plan to expand its oil production as well as its potential for solar and wind energy.
In the wake of a decade marred by political instability and conflict, Libya’s energy sector, a linchpin of its economy and a long-standing player in the global energy market, is showing signs of a promising turnaround despite the many obstacles that need to be addressed.
The country’s economy is highly dependent on oil and natural gas exports, which account for approximately 65% of its GDP and over 90% of government revenues.
Home to the largest oil reserves in Africa, Libya has historically been a vital oil exporter, particularly to European markets.
It is also a member of the Organization of the Petroleum Exporting Countries (OPEC) and has one of the largest oil reserves, totaling over 48.4 billion barrels.
In addition to oil, Libya has substantial natural gas reserves with proven natural gas resources in the region of 53 trillion cubic feet.
Libya’s crude oil production traces back to the 1950s, when significant reserves were discovered in the country’s vast desert regions. Throughout the years, the country’s crude oil production has fluctuated significantly, and it has struggled with a myriad of issues, such as persistent political upheaval and infrastructure challenges.
Security concerns at major oil facilities have disrupted operations, and the absence of a stable government has discouraged foreign investment, which is critical for technological advancement and infrastructural development.
From over 3 million barrels per day (bpd) in the 1970s, Libya’s production has undergone several ups and downs and plummeted to its lowest level of 465,000 bpd in 2011 during the peak of the “Arab Spring” uprisings.
However, Libya’s state oil company, NOC, has recently boosted efforts to negotiate the reopening of major oil fields and export terminals to revive its sector and economy.
– Ambitious target of 2 million bpd oil production
With plans to boost oil output from the current levels of 1.2 million bpd to 2 million bpd within the next two to five years, the country is working on modernizing operations and infrastructure in the upstream, middle, and downstream sectors of the oil and gas industry.
The NOC has recently announced plans to meet this target, with two bidding rounds due in 2024. This initiative aims to boost oil production, establish a natural gas liquefaction plant and a gas pipeline to Egypt.
NOC Chairman Farhat Bengdara said during the COP28 in November 2023 that US, European and Far Eastern companies may participate in these rounds without elaborating on the names of the companies.
– Several energy deals with energy majors in 2023
Libya marked last year with major agreements and initiatives in oil, gas, and renewable energy as part of its effort to transform its energy sector.
In a landmark $8 billion deal in January, Italian energy company Eni and NOC partnered to boost gas production, aiming to enhance both domestic supply and European exports. This project, set to commence in 2026, is poised to significantly elevate Libya’s gas output.
In March, the NOC awarded a contract to US firm Honeywell-UOP to construct a 30,000-bpd refinery.
In July, Libya’s National Drilling Company, a subsidiary of the NOC, selected US-based SLB to drill three new wells in the Nesr and Al Waha fields.
In October, the NOC signed an agreement with Equinor to study the country’s offshore potential with the aim of opening up new wells and production sites.
Firms like TotalEnergies, OMV, Sonatrach, bp and Eni also resumed operations in various Libyan fields, overcoming disruptions from previous force majeure declarations. Repsol also plans to begin exploratory drilling in the Murzuq Basin in early April 2024.
In November, Italian engineering and construction services firm Rosetti was awarded a $300 million contract to carry out engineering, procurement and construction services for a large-scale gas production project offshore Libya, while several exploration activities are underway.
– Deals with multinational firms are cementing greater efforts for renewable energy deployment
Complementing these developments in fossil fuels, Libya is also advancing in renewable energy, aligning with global trends towards decarbonization.
Given its geographical advantages, the country holds large potential for solar and wind energy production and targets a 20% renewable contribution to its electric energy mix, primarily from solar and wind sources by 2035.
Notable among these efforts is a collaboration with TotalEnergies to develop 500 megawatts of solar PV projects that was agreed upon in October 2022, a significant move towards harnessing Libya’s vast solar potential.
– New era in Turkish-Libyan energy cooperation
In a move signaling Libya’s commitment to bolster its economy through strategic partnerships, the country is actively seeking the participation of foreign investors, particularly from Türkiye, to unlock its energy sector’s potential.
In an interview with Anadolu last year, Libyan Minister of Petroleum and Natural Gas, Mohamed Oun, conveyed his country’s plans to invite international expertise for seismic research.
Oun stressed that Turkish companies would be given priority in this endeavor, highlighting their expertise and capabilities in seismic and drilling operations and given their specialized vessels to undertake these operations.
Back in Oct. 2022, Türkiye and Libya had signed a memorandum of understanding on hydrocarbon.
– Libya to host key energy summit in Tripoli
In a strategic move to bolster international energy cooperation, Libya is organizing its second annual Libya Energy and Economy Summit.
The event, scheduled to take place between Jan. 13 and 14 in the capital Tripoli, is themed A New Libya: Built on Energy.
The summit is a focal point for evaluating investment opportunities in the country, signaling its readiness to enter a new phase of energy collaboration with various countries, notably Türkiye.
Organized by Energy Capital & Power (ECP) in collaboration with Libya’s Prime Ministry, the Oil and Gas Ministry, the NOC, and the Renewable Energy Authority of Libya, the summit will bring together Libya’s key policymakers, industry leaders, and stakeholders with global energy and economy sector leaders and companies.
The event will also allow participants to discuss opportunities not only for Libya’s energy sector but also for international energy firms considering investment in the country.
By Firdevs Yuksel and Sibel Morrow in Tripoli, Libya
Anadolu Agency
Source link : https://www.aa.com.tr/en/energy/oil/libya-eyes-new-energy-sector-era-with-renewed-goals-deals/40208?amp=1
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Publish date : 2024-01-13 08:00:00
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