Tapping into Libya’s unused potential in energy and trade

The search for alternative sources of hydrocarbons in the aftermath of the Ukraine conflict continues to raise Libya’s profile among international investors. The National Oil Corporation (NOC) has since late last year sought to have force majeure removed by international oil corporations and widen the pool of stakeholders investing in Libya’s energy sector.

This month, the Italian corporation Eni decided to lift the force majeure status on onshore exploration areas A and B and offshore area C, a move which follows earlier plans to invest €7.4bn to produce more gas from Libya by 2026. Other companies such as Britain’s BP and Algeria’s Sonatrach have also lifted force majeure on their contracts in Libya, and Italy’s Saipem recently signed a €900 million deal to rejuvenate and reinforce platforms on Libya’s Bouri natural gas field. Domestic private companies have also been given the opportunity to take part in oil production by the NOC, thus widening their range of activities which so far only included drilling, transportation, and logistics.

Regarding trade and infrastructure, Egyptian contractors have recently initiated many projects, whether in eastern or western Libya, despite concerns by businessmen that trade volumes have dropped from €1.2bn to €460 million in a decade. Based on a January 2022 contract signed by the GNU, a consortium of Egyptian companies are now set to construct a road linking Ghat to Ubari, the second largest city in the Fezzan and the closest to Sharara oil field. Egypt’s President also announced a project to upgrade the Sallum land crossing linking his country to Libya, with a plan to establish a logistical zone.