Libya granted several foreign companies new oil exploration and production licences for the first time in 17 years on Wednesday, after more than a decade of political instability.
With oil and gas production and exports at their strongest since 2011, the North African country is seeking to draw major global energy companies back.
But its oil industry has faced significant challenges since a NATO-backed revolt toppled and killed longtime leader Muammar Gaddafi in 2011, with the country still divided between rival authorities.
Wednesday’s winners of the latest bidding round included US oil giant Chevron and Africa’s largest privately-owned energy company, Nigeria’s Aiteo.
The other winning bidders were consortiums: Spain’s Repsol with British Petroleum, Eni North Africa with QatarEnergy, and Repsol with Hungary’s MOLGroup and Turkiye Petrolleri.
But only five blocks drew bids out of a total of 20 offered up for exploration and extraction.
The National Oil Corporation (NOC) announced there will be another bidding round later this year.
“The limited response to the licensing round is underwhelming for the NOC, especially given that dozens of companies — including prominent international oil companies — had pre-qualified,” said Hamish Kinnear, an analyst with UK-based Verisk Maplecroft.
“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,” he told AFP.
Libya currently produces around 1.5 million barrels a day, sitting on Africa’s largest oil reserves at an estimated 48.4 billion barrels.
Geoff Porter, an analyst with North Africa Risk Consulting, said the bids were “a considerable disappointment when measured against expectations”.
Oil companies may be hesitant to participate in competitive tenders because the TotalEnergies and ConocoPhillips deal showed you can get better terms via direct negotiation with NOC, Porter told AFP.
Last month, Libya signed agreements worth more than $20 billion of investment by TotalEnergies and ConocoPhillips to increase oil production within 25 years.
Prime Minister Abdelhamid Dbeibah, who announced the deal, said the goal was to boost daily oil production by 850,000 barrels within that timeframe.
Libya expert Jalel Harchaoui agreed that the bidding round was “no great success”.
For him, lacklustre interest may suggest the existence of “private, one-on-one negotiations” between the government and other companies on the sidelines of the public bidding.
He said “ExxonMobil and other major corporations” were already holding talks with Libya that would “bypass any kind of structured bidding process”.
NOC chief Masoud Suleman said a committee will be created to “improve the terms” of the bidding system and negotiate with candidates to grant unallocated blocks.
Still, Wednesday’s announcements were “a return of trust and resuming institutional work in one of the country’s most important sectors after a long period of pause and challenges”, Suleman said during the ceremony.
“They are part of a broader national path that aims for prosperity, growth, and the return of normalcy,” he added.
