After 17 Years Libya Grants Oil Licence to Foreign Companies

Libya has awarded new oil and gas exploration licenses for the first time in 17 years, signaling a controlled reopening of its hydrocarbons sector after more than a decade of political fragmentation and security disruptions.

The National Oil Corporation’s 2025 tender drew majors including Chevron, Eni and QatarEnergy, alongside Türkiye’s state energy company TPAO, but only five of 20 blocks on offer were allocated.

Seventeen-Year Licensing Gap

The National Oil Corporation announced the results on Wednesday, marking its first licensing round since 2007. Of 20 blocks offered, including 11 offshore, five were awarded.

None of the offshore blocks in the initial offering phase received bids, though subsequent allocations included offshore acreage. The round forms part of a broader 22-block tender launched in 2025.

Winning bidders include U.S. major Chevron and Nigeria’s Aiteo. Consortia featured Spain’s Repsol with British Petroleum, Eni North Africa with QatarEnergy, and Repsol with Hungary’s MOL Group and Türkiye Petrolleri Anonim Ortaklığı, known as TPAO.

TPAO secured two blocks. Onshore Block C3 in the Sirte Basin, covering approximately 8,200 km², was awarded to a TPAO-Repsol consortium, with Repsol as operator.

Offshore Block O7, a deepwater tract off Benghazi spanning roughly 10,300 km², was allocated to TPAO with a 40 percent stake, alongside Repsol at 40 percent as operator and MOL at 20 percent.

Production Targets and Capital Commitments

The licensing round follows agreements worth more than $20bn signed last month with TotalEnergies and ConocoPhillips to increase oil production over 25 years.

Libyan Prime Minister Abdelhamid Dbeibah said the objective is to raise daily output by 850,000 barrels within that timeframe. Libya currently produces between 1.4 million and 1.5 million barrels per day and holds Africa’s largest proven oil reserves, estimated at 48.4 billion barrels.

The NOC introduced a revised contract model intended to be more investor-friendly, replacing earlier terms that had deterred foreign participation.

NOC chief Masoud Suleman described the awards as “a return of trust and resuming institutional work in one of the country's most important sectors after a long time of pause and challenges.”

He added that the process would uphold “integrity, transparency, equal opportunities” and seek to “maximise national returns.”

Suleman emphasized that “Today's announcements are not merely technical or administrative,” adding: “They are part of a broader national path that aims for prosperity, growth, the return of normalcy.”

Political Fragmentation as Constraint

Investor caution remains shaped by Libya’s post-2011 trajectory. The NATO-backed revolt that toppled Muammar Gaddafi in 2011 fractured the state into rival eastern and western administrations. Disputes over control of the central bank and oil revenues have periodically disrupted output at major fields.

Hamish Kinnear, an analyst with Verisk Maplecroft, told AFP that “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.”

The allocation of five blocks out of 20 underscores that renewed interest has not erased structural risk.

The NOC said a committee would be formed to “improve the terms” of the bidding system and negotiate with candidates for unallocated blocks.

Another licensing round is planned later in 2025, as authorities test whether contractual adjustments and large-scale commitments such as the $20bn agreements can translate into sustained upstream investment.