Libya allocates $1.2bn for upstream oil project
3 May 2024
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Libya has allocated LD6bn ($1.23bn) to develop the Hamada NC-7 concession in its latest budget, which was approved by Libya’s eastern-based parliament on 30 April, according to industry sources.
The field development project was previously estimated to be worth between $4bn and $5bn.
The project aims to develop 2.7 trillion cubic feet of gas reserves in the NC-7 block of the Ghadames basin.
A consortium led by Italy’s Eni and including France’s TotalEnergies and UAE-based Adnoc operates the block.
Development of the field was included in the 2024 annual budget of LD90bn ($18.5bn), excluding an item for development projects, which the Benghazi-based government of Osama Hamad unanimously approved.
Hamad came to power in March 2023 and is allied with the military commander Khalifa Haftar, who controls the east and large parts of the southern region of Libya.
Progress on developing the Hamada NC-7 concession has been slow amid concerns among politicians about the involvement of foreign oil companies in key hydrocarbon assets.
On 15 December 2023, the Tripoli-based Ministry of Oil & Gas issued a statement condemning the terms of the planned gas development contract between Libya’s state-owned National Oil Corporation (NOC) and the consortium led by Eni.
In the statement, the Ministry of Oil & Gas described the deal as a “violation of Libyan legislation on oil contracts”.
Earlier this year, NOC announced a plan to execute 45 greenfield and brownfield projects to try to boost the country’s oil production from 1.25 million barrels a day (b/d) to 2 million b/d.
Farhat Bengdara, the chairman of NOC, said that the projects had a total estimated cost of $17bn-$18bn.
Bengdara also confirmed plans to launch an oil and gas licensing round at the end of 2024 or early 2025.
Libya is aiming to hit its 2 million b/d target within three years.
Bengdara said that gas monetisation will remain a strategic focus as the country pushes to increase exports to Europe.
Libya is only using 25% of the capacity of its Greenstream pipeline to Italy.
The North African country also flares significant volumes of natural gas and has 12 projects under way that aim to reduce gas flaring to almost zero, according to Bengdara.
In recent years, Libya has struggled to execute large projects amid significant political instability.
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