Libyan NOC backs Eni on NC7 gas field development despite regulatory and political challenges

The National Oil Corporation (NOC) is adamant about its decision to develop the Hamada (NC7) gas field through an international consortium led by Italy’s energy giant ENI, despite facing strong opposition from various Libyan entities, including the Attorney General's Office, the Audit Bureau, the House of Representatives (HOR), and even an expert team appointed by the Government of National Unity (GNU). Critics have raised concerns about potential corruption and a disregard for Libya's national interests.

A closer look

The Hamada field was initially discovered in 1960 by the Oasis Oil Company, in a consortium that included the American firms ConocoPhillips, Amerada Hess, and Marathon, and was later relinquished to Waha Oil Company. The company operates several oil fields in the Sirte Basin, including the Waha, Gialo, Dahra, and Defa fields, which have been central to Libya's oil production for decades. In 2004, the NOC attempted to develop the Hamada field with Edison Tam Gas but the project stalled. In 2019, the NOC approached international companies to explore investment opportunities, leading to the current consortium proposal led by ENI.

The NOC's decision to develop the Hamada field highlights the broader challenges facing Libya's oil and gas sector, including financial constraints, governance issues, and the need for infrastructure development. Addressing these challenges is crucial for maximising Libya's oil and gas potential and ensuring the sector's contribution to the country's economic development.

The NOC maintains that developing the Hamada field with an international consortium, comprising Eni (Italy), TotalEnergies (France), and ADNOC (UAE), is the most viable option compared to self-financing through local NOC subsidiaries. This preference stems from several factors:

• Financial Constraints: The NOC asserts that it lacks the necessary funds to undertake the project independently, requiring an estimated $4 to $5 billion.
• Expertise and Technology: Partnering with international companies brings access to advanced expertise and technologies essential for efficient and effective field development.
• Risk Mitigation: Spreading the financial burden and technical responsibilities among multiple partners reduces the overall risk for the NOC.

Estimated gas reserves and development plan