The Future of Resource Extraction in Modern Libya

After more than a decade marked by uncertainty and operational challenges, Libya's energy market could be entering a new phase of growth.

The North African nation has signed a series of major agreements with international energy companies, signalling what industry observers describe as renewed confidence in the country's hydrocarbon sector.

Libya has finalised a 25-year development agreement with TotalEnergies and ConocoPhillips through state-run Waha Oil Company.

The deal involves more than US$20bn in externally financed investment and targets production capacity increases at the Waha concessions of up to 850,000 barrels per day (bpd) from current output levels of between 340,000bpd and 400,000bpd.

The investment could generate net revenues exceeding US$376bn over the contract period, according to the National Oil Corporation's projections.

TotalEnergies CEO Patrick Pouyanné and ConocoPhillips CEO Ryan Lance signed the amended agreement at the Libya Energy & Economic Summit in Tripoli on 25 January 2025.

The African Energy Chamber has framed this surge in investment as a notable comeback for Libya, where oil and gas production had fallen considerably below potential between 2014 and 2023. The country's crude oil production averaged approximately 1.375 million bpd in 2025, representing the highest level since 2013.

By early 2026, total oil production in Libya exceeded 1.52 million bpd according to the Ministry of Oil and Gas figures. The country's oil revenues amounted to around US$22bn in 2025, marking a 15% year-on-year increase. Prime Minister Abdulhamid Dbeibah attributed this recovery to the activation of several fields including Iravn, Mutahandush, al-Khayr, Hamada 47 and Sinawan.

Libya's Oil and Gas Minister, Khalifa Abdulsadek, has outlined plans to increase crude output to 1.6 million bpd by the end of 2026.

Gas developments gather momentum

Gas production has also been expanding in Libya. Italian energy firm Eni has confirmed that its US$8bn Structures A&E offshore gas development remains on schedule. The project, led by Mellitah Oil & Gas, is a joint venture between Eni and Libya's National Oil Corporation and is scheduled for completion by the end of 2027.

At full capacity, the development could add around 750 million standard cubic feet per day of gas production, supporting both domestic demand and European exports via subsea pipelines to Italy or LNG tankers.

Eni also announced that its Bahr Essalam gas compression project is scheduled to begin operations in early 2026, adding approximately 100 million standard cubic feet per day to Libya's gas output. A second gas utilisation project is planned for the third quarter of 2026, potentially delivering an additional 100–120 million standard cubic feet per day.

US companies expand involvement

American energy companies have also been increasing their presence in Libya's upstream sector. Chevron has signed a memorandum of understanding with the National Oil Corporation covering exploration, field development and production opportunities. The agreement marks the US oil major's renewed interest in Libya's hydrocarbon sector after years of limited international engagement.

Libya also signed a cooperation agreement with Egypt's oil ministry during the summit, focusing on exploration, production and logistics services.

The agreements reflect what Prime Minister Dbeibah has described as "the strengthening of Libya's relations with its largest and most influential international partners in the global energy sector".

First licensing round attracts applications

Libya launched its first oil and gas exploration licensing round in 17 years last March, offering 22 onshore and offshore blocks across the Sirte, Murzuq and Ghadames basins. Eni was among more than 50 companies that submitted pre-qualification applications, alongside several major international oil firms.

The round operates under revised fiscal and profit-sharing terms designed to improve competitiveness and attract investment. Results are expected to be announced in the second week of February 2026.

Foreign investors have approached Libya with caution since 2011 due to the period of political instability that followed the overthrow of Muammar Gaddafi during the Arab Spring. Disputes between rival factions over oil revenues have frequently led to production shutdowns and export disruptions.

However, these recent agreements could suggest that confidence in Libya is growing, with the nation's ability to maintain operational stability and honour long-term commercial commitments now viewed more favourably by international operators.

Libya holds an estimated 48.4 billion barrels of proven oil reserves and approximately 1.5 trillion cubic metres of natural gas reserves, making it Africa's largest oil producer and the continent's third largest gas producer.