- Oil & Gas
Libya Energy Insights (Jan 2026)
This report provides analysis and insights into Libya's energy sector for the month of January, 2026. A downloadable PDF version of the report is available at the end of the page.
Market Outlook
Libya's oil and gas sector continues to demonstrate operational resilience alongside deepening fiscal fragility. Persistent transparency issues, accounting discrepancies, and revenue shortfalls are swept under the rug, notably ahead of February’s bid round results, so as to bolster investors’ confidence and bring about major deals to boost output by converting international interest into binding agreements.
This approach is working with a record-breaking agreement worth $20 billion announced during the Libya Energy and Economy Summit in late January. Overall, Libya may experience substantial output increases despite its weak fiscal discipline and non-transparent revenue mismanagement, but faulty governance frameworks cannot ensure long-term success and sustained political stability.
Key Highlights
- National Oil Corporation (NOC) subsidiaries pursue incremental improvements via new drilling, well reactivations, and gas-flaring reductions despite budget constraints.
- A record-breaking $20 billion agreement was signed to develop Waha Oil Company’s fields with TotalEnergies and ConocoPhillips, targeting a doubling of capacity to 850,000 barrels per day by mid-century.
- Gas flaring was reduced by 100 million cubic feet per day in 2025, with the NOC targeting 120 million cubic feet per day in further reductions for 2026.
- Although 2025 oil revenues increased around 15% compared to 2024, Libya’s fiscal position is weakening with the Central Bank (CBL) forced to devalue the dinar and warning against unsustainable spending.
- Persistent revenue discrepancies between NOC-reported transfers and CBL recorded receipts raise acute transparency concerns.
- Nonetheless, international interest continues to grow over Libya’s competitive advantages, including its repairable infrastructure, low-cost fields, and proximity to European markets.
- Licensing-round results are expected in mid-February, after nearly a year of preparations and applications by major global corporations. Anticipating broad success for the first bid, Libya is almost certain about organising a second licensing round.
