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Libya in talks with contractors to take over upstream oil project

24 March 2026

 

Libya’s National Oil Corporation (NOC) is in talks with contractors regarding a project to deliver an early production facility (EPF) at the North African country’s Erawin field, according to industry sources.

The contract was originally awarded to the UK-based engineering company Petrofac.

Petrofac secured the contract with Zallaf Libya Oil & Gas Exploration & Production Company to deliver the Erawin field development project phase 1 EPF in September 2021.

Earlier this month, MEED reported that Petrofac had stopped work on the project and cut the number of Libyan staff that it was employing in the country.

One industry source said: “Libya’s NOC is now looking for other companies to take over this project and finish the job.

“This project is considered important for hitting upstream targets, so the client does not believe that it has the time to go through an open tender process.

“It’s looking to negotiate a direct deal with a company that can start work as soon as possible.”

The scope of work for the original project awarded by Zallaf to Petrofac included surface equipment, such as well pads and flowlines, at the Erawin oil field.

It also included a pipeline to transport crude oil approximately 100 kilometres (km) to the El-Sharara oil field, along with a control room, substation and telecom system located there.

Petrofac has already completed several parts of the original project scope.

The completed parts of the project include the pipeline infrastructure, which has been in operation for more than a year, according to Petrofac.

Zallaf Libya Oil & Gas Exploration & Production Company was established in Libya in 2013 and is wholly owned by NOC.

It awarded the Erawin EPF contract to Petrofac using the engineering, procurement, construction and commissioning (EPCC) contract model.

In a statement in 2021, Petrofac said the contract was valued at over $100m, but did not give a precise figure.

The regional project-tracking service MEED Projects has estimated that the contract was worth $440m.

Petrofac problems

On 27 October last year, Petrofac announced that it had applied to appoint administrators, a move that potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.

At the time, the total value of projects awarded to Petrofac and under construction in the region was $5.83bn, according to information recorded by MEED Projects.

Petrofac also had bids under evaluation for 15 projects in the region worth a total of $19.28bn.

Since then, key parts of the business have been sold off, and many of the company’s staff have been made redundant.

The redundancies included around 180 employees who were issued termination notices in October last year.

In December, the US-based company CB&I announced it had entered into a deal to buy Petrofac’s asset solutions business in the first quarter of 2026.

In January this year, the proposed company voluntary arrangement (CVA) related to the sale of its Asset Solutions business was approved.

Erawin exports

Libya shipped its first cargo of crude from the Erawin oil field in November 2023.

The shipment departed from Libya’s Zawiyah port and consisted of 600,000 barrels of crude.

Australia-based Worley Parsons was appointed as the front-end engineering and design (feed) contractor for the EPF project in 2019.

The Erawin field development project is located about 800km south of Tripoli and 100km southwest of the El-Sharara field.

https://image.digitalinsightresearch.in/uploads/NewsArticle/16091911/main.png
Wil Crisp

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