meed-logo

line1 line2 line3
SIGN IN / REGISTER

Uncertainty and instability damage Libyan oil sector optimism

24 February 2025

 

Register for MEED’s 14-day trial access 

Optimism among stakeholders in Libya’s oil and gas sector has evaporated in recent months as the approval of the country’s budget has been delayed and instability has undermined operations at state-owned oil and gas companies.

In early February, the UN Support Mission in Libya (Unsmil) called for all the conflicting parties in the North African country to start work immediately on agreeing on a unified state budget.

It said a transparent and equitable budget is crucial for strengthening fiscal responsibility, optimising resource allocation and ensuring economic stability in Libya.

Unified budget

A unified budget is also expected to enhance the ability of the Central Bank of Libya to implement effective monetary policies, stabilise the exchange rate and manage public spending sustainably.

Several meetings have been held to attempt to reach an approval on a unified budget for 2025, but little progress has been made by Libya’s rival political factions towards reaching an agreement.

In December, Stephanie Koury, acting UN special representative for Libya, said: “A unified budget is essential to establish clear spending limits and ensure transparent management of public resources.”

Libya’s oil and gas industry is one of the most important sectors, in terms of generating government revenues, that has been impacted by the budget delays.

One industry source said: “If a unified budget isn’t approved within the next 30 days, the consequences are going to be very serious.

“You can forget about all of the progress that has been made in the country’s oil and gas sector over the last two or three years – we are going to set right back to square one.”

Without a budget being approved, state-owned oil companies are struggling to push forward with their investment plans and the development of projects.

Licensing round

As well as ongoing delays to projects and approvals in Libya’s oil and gas sector, the country’s plans for its first oil and gas licensing round in 15 years are being delayed.

In January 2024, Libya’s National Oil Corporation (NOC) announced its plan to launch the round.

The bid round for exploration and production agreements was expected to offer exploration blocks in the Murzuq, Ghadames and Sirte basins.

As well as ongoing delays to projects and approvals in Libya’s oil and gas sector, the country’s plans for its first oil and gas licensing round in 15 years are being delayed.

Throughout much of 2024, there was significant optimism that the round would be launched without major delays and that it could support the country’s plans to boost oil and gas production.

In 2024, 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.

Libya is aiming to hit its 2 million b/d target within three years.

It was initially expected that the planned licensing round would be launched in late October or early November of 2024.

However, in October, delays started to be announced – and now stakeholders have significant doubts about whether the round will be launched before the end of 2025.

The budget delays and other ongoing disagreements between the country’s rival political factions are damaging the image of the country’s oil and gas sector and are likely to make international companies less interested in participating in the bidding round, if it is eventually launched.

One industry source said: “In the middle of last year, a lot of big international companies were showing interest, but now it is all negativity.

“People were talking about the licensing round and new projects, as well as expanding existing projects.

“Now, all of those discussions have evaporated.”

Sentiment is also being damaged by clashes in the country.

In 2024, there were several violent clashes between militias, including in Zawiya in July.

These were followed by further hostilities in the same region in December, which occurred next to the Zawiya refinery and caused a major fire at the facility.

Oil sector leadership

Instability in Libya’s oil and gas sector has been exacerbated by major changes in senior positions within the country’s publicly owned oil and gas companies and the oil ministry.

In June 2024, Libya's sidelined oil minister Mohamed Oun called on Tripoli-based Prime Minister Abdelhamid Dbeibeh to clarify who was in charge of the ministry.

Exactly who ran the oil ministry became unclear after Oun returned to work on 28 May 2024, following the lifting of a temporary suspension by a state watchdog.

During his absence, Oun was replaced by oil ministry undersecretary Khalifa Rajab Abdulsadek, who represented Libya at an Opec+ meeting on 2 June.

Oun complained that Dbeibeh refused to recognise him as oil minister after his return to work, and Oun then cut off all communication with him, making it impossible to carry out his duties.

Oun was ultimately officially replaced by Abdulsadek, who continues to run the ministry.

NOC has seen other major changes. The resignation of chairman Farhat Bengdara was accepted in January and he has been replaced by acting chairman Massoud Suleman.

NOC subsidiaries have also seen tumultuous changes in recent months.

In mid-February, the chairman of Libya’s state-owned Waha Oil Company, Fathi Ben-Zahia, was detained on several charges, sparking concerns about the future of oil and gas projects in the country.

Waha is one of the biggest and most active subsidiaries of NOC and is responsible for some of the country’s biggest active oil projects.

The charges against Ben-Zahia include a LD770m ($156m) contract fraud, according to a statement issued by the country’s Attorney General’s Office.

The statement said that preliminary research by the attorney general’s deputy public prosecutor had revealed that the Waha chairman had awarded a contract worth LD770m for sea defences at the Sidra oil port, when a lower bid of LD339m was submitted by another company competing for the contract.

Prior to the arrest of Ben-Zahia, Waha was seen as one of the best-performing state oil companies in the country.

In November last year, Waha Oil Company reported its highest crude production level in 11 years.

The company recorded a daily output of 350,549 barrels, contributing to Libya’s total daily production of 1.4 million barrels.

Private sector

While the country’s public sector oil companies have run into more problems in recent months, and struggled to deal with issues related to the delays to the unified budget, Libya's first private company to export oil has seen significant growth.

Arkenu Oil Company, which was set up in 2023 and is linked to the faction that controls eastern Libya, has exported oil worth at least $600m since May 2024, according to shipping records and UN experts.

According to experts, this means that some of the country's oil revenue is likely being channelled away from the central bank.

One industry source said: “The activities of Arkenu Oil Company are worrying because it shows that institutions like NOC and the central bank are losing their grip on the country’s oil and gas sector.”

Economic problems

Projects in Libya are also suffering from broader economic issues that could get a lot worse if there are further delays to the approval of a unified budget for 2025.

NOC is already suffering from major cash flow issues that will be exacerbated by further delays.

It is also likely that value of the Libyan dinar against the US dollar on the black market will be weakened, and more pressure will be put on the country’s foreign exchange reserves.

Further currency weakness is likely to make it harder to import materials and equipment for new projects, as well as making it more difficult to get spare parts for existing facilities.

One source said: “Right now, the dialogue about oil and gas projects in Libya is changing dramatically.

“Before, we were talking about which new projects were going to get developed and how quickly. Now, we are no longer talking about new projects and there are concerns that existing facilities will face major problems.”

The ongoing challenges in Libya, and the failure to deal with key issues, means that in the future the country could see declines in upstream production rates and refinery throughput, rather than the expansions that were previously expected.

READ MEED’s YEARBOOK 2025

MEED’s 16th highly prized flagship Yearbook publication is available to read, offering subscribers analysis on the outlook for the Mena region’s major markets.

Published on 31 December 2024 and distributed to senior decision-makers in the region and around the world, the MEED Yearbook 2025 includes:

> GIGAPROJECTS INDEX: Gigaproject spending finds a level
https://image.digitalinsightresearch.in/uploads/NewsArticle/13419239/main.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Consultants submit bids for Saudi Arabia’s GCC rail link

    20 July 2026

     

    Consultants submitted proposals on 14 July for a contract to provide design consultancy services for the Saudi Arabian section of the GCC railway network, which is intended to link all six member states.

    Saudi Arabia Railways (SAR) issued the tender on 7 May, MEED previously reported.

    The tender covers the concept, preliminary and issued for construction design stages. SAR requires the selected consultant to review, update and complete the existing preliminary design.

    The consultants who submitted bids include: 

    • Atkins with Khatib & Alami
    • DeutscheBahn with ARX
    • Egis with Sener
    • Idom with Dal al-Handasah
    • Systra

    Saudi Arabia’s section of the railway will start at Al-Khafji in the Eastern Province, near the border with Kuwait, and end at Al-Batha, on Saudi Arabia’s border with the UAE. The route length in Saudi Arabia will be about 672 kilometres (km).

    The railway will interface with the Kuwait National Rail Road (KNRR) project on the Kuwaiti side. Last year, MEED exclusively reported that the KNRR design contract was awarded to Turkiye’s Proyapi Muhendislik ve Musavirlik Anonim Sirketi.

    The KNRR forms part of the wider GCC rail network. GCC railway projects have gained renewed momentum since the six member states signed the Al-Ula Declaration in January 2021.

    In October last year, Qatar’s cabinet approved a draft agreement paving the way for a railway link between Qatar and Saudi Arabia as part of the GCC railway network.

    GCC railway line

    Under the overall plan, the railway will run from Kuwait, pass through Dammam in Saudi Arabia, reach Bahrain via a planned causeway, and continue from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman. The railway is reported to span about 2,186km in total.

    The route length within each member state is as follows: 684km in the UAE, 672km in Saudi Arabia, 306km in Oman, 283km in Qatar, 145km in Kuwait and 36km in Bahrain.

    The railway is designed for passenger trains travelling at 220km/h and freight trains operating at 80-120km/h.

    With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but still divided by national borders.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17705320/main.gif
    Yasir Iqbal
  • Chinese firm wins Dubai drainage contract

    20 July 2026

    China State Construction Engineering Corporation (CSCEC) has announced it has won a contract to deliver a stormwater drainage pipeline package under Dubai Municipality’s Tasreef programme.

    The contract is for the TF-15-C2 stormwater drainage network project located along Umm Suqeim Road in the Al-Barsha and Al-Quoz areas of Dubai. 

    MEED exclusively revealed in May that the contractor had been selected for the engineering, procurement and construction (EPC) contract. The project is estimated to cost $162m.

    The scope of work includes the construction of about 20 kilometres of new stormwater pipelines, together with associated inspection and intake manholes. The project is located west of the Dubai Canal and will connect the Al-Quoz 3 and Al-Quoz 4 industrial areas with Al-Quoz 1.

    It is being delivered as part of Dubai’s Tasreef strategic plan, which supports the Dubai 2040 Urban Master Plan. Once completed, the new drainage infrastructure is expected to improve the emirate’s stormwater network, increase flood protection and enhance the resilience of Dubai’s infrastructure.

    In February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

    These include a separate contract awarded to CSCEC for the TF-11-C1 stormwater drainage project in the Dubailand area.

    Also in February, Dubai Municipality invited consultants to qualify for a contract to supervise construction on the TF-15-C2 stormwater drainage projects along with two other projects (TF-13-C1 and TF-16-C1) under the Tasreef programme.

    According to a source, a consultant has yet to be appointed.

    TF-16-C1 involves upgrading and rehabilitating the stormwater system east of the Dubai Canal, while TF-13-C1 involves building a water pipeline stormwater drainage system at Al-Marmoum, Al-Qudra and Al-Yalayis 2 & 3.

    Bids are currently under evaluation for the EPC contracts for both projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17705058/main.jpg
    Mark Dowdall
  • Dubai receives eight bids for Hassyan SWRO pipeline contract

    20 July 2026

    Register for MEED’s 14-day trial access 

    Eight contractors have made offers for a contract to supply, install, test and commission glass-reinforced epoxy (GRE) water transmission pipelines and associated works for the Hassyan seawater reverse osmosis (SWRO) phase two network in Dubai.

    The contract relates to project one of the Hassyan pipeline network expansion being undertaken by state utility Dubai Electricity & Water Authority (Dewa).

    Local firm Binladin Contracting Group submitted the lowest offer of AED335.92m ($91.5m), according to results published by the utility.

    The other bids were:

    • Green Oasis General Contracting (UAE) – AED345.00m ($93.9m)
    • Al-Nasr Contracting (UAE) – AED391.54m ($106.6m)
    • Wade Adams Contracting (UAE) – AED393.80m ($107.2m)
    • RMB Contracting (UAE) – AED437.96m ($119.3m) 
    • Tristar Engineering & Construction (UAE) – AED441.55m ($120.2m)
    • Shapoorji Pallonji Mideast (UAE/India) – AED451.47m ($122.9m)
    • Gulf Petrochemical Services Trading (UAE) – AED495.20m ($134.8m)

    RMB also submitted a conditional discounted offer of AED427.02m ($116.3m). Three companies submitted regret notices, while one offer was rejected after no valid commercial offer was received. 

    In January, Dewa announced that construction of the 180-million-imperial-gallon-a-day phase one of the Hassyan SWRO independent water project was 90% complete.

    Dewa has two other contracts out for tender for GRE water transmission pipeline work related to the Hassyan SWRO phase two network.

    Project two was tendered on 22 January and has a bid submission deadline of 21 July. Project three was tendered on 26 January and has a bid submission deadline of 29 July.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17704940/main.jpg
    Mark Dowdall
  • Abu Dhabi launches E20 highway expansion project

    20 July 2026

    Abu Dhabi’s Department of Municipalities and Transport (DMT) has announced the E20 highway expansion project.

    The scheme covers widening the main carriageway from three to five lanes, constructing more than 10 kilometres (km) of new ramps and loops, and building four bridges.

    Works also include 1.5km of internal roads and the addition of eight signalised junctions across Khalifa City and the Zayed International airport precinct.

    The project includes utility works, comprising 62km of stormwater drainage, 37km of irrigation networks and the installation of 485 streetlights.

    The E20 expansion is one of the major infrastructure schemes being overseen by DMT in Abu Dhabi.

    Separately, DMT is evaluating bids for a design-and-build contract to construct two bridges serving Hudayriyat Island in Abu Dhabi.

    The scope includes a two-lane bridge connecting 32nd Street to Shakhbout Bin Sultan Street, and a single-lane bridge on 8th Street. It also includes upgrades to signalised intersections.

    Shakhbout Bin Sultan Street is a two-way road with three lanes in each direction, providing access to and from Hudayriyat Island.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17704696/main.jpg
    Yasir Iqbal
  • Firms given more time for Mid Island Parkway prequalifications

    20 July 2026

     

    Abu Dhabi’s Modon Infrastructure has extended the deadline to 31 July for firms to submit expressions of interest and prequalification statements for the next phase of Abu Dhabi’s Mid Island Parkway Project (MIPP), which will be developed as a public-private partnership (PPP).

    The previous deadline was 15 July. MEED understands the prequalification notice was issued in June, following Modon Infrastructure’s invitation in May for firms to register their interest.

    Modon Infrastructure will act as the lead developer and will hold a majority equity stake in the project company. It will award contracts for engineering, procurement and construction; operations and maintenance; and project advisory services.

    Phase two of the MIPP involves the construction of about 11 kilometres (km) of highways, comprising a mix of three-, four- and five-lane sections. The highways will connect the Um-Yifeenah, Al-Jubail, Al-Sammaliyyah and Sas Al-Nakhl islands to Khalifa City and the E10 road.

    The scope also includes the construction of three interchanges – E20, E10 and Dumbbell – on Al-Sammaliyyah Island.

    The project includes several major structures, including the E20 interchange, which will feature cast-in-place box-girder and void-slab bridges, and the E10 interchange, which will feature cast-in-place box-girder bridges. It also includes I-girder bridges between Raha Beach West and Sas Al-Nakhl Island, as well as a causeway at Sas Al-Nakhl Island.

    Further elements include a cast-in-place balanced cantilever bridge between Sas Al-Nakhl Island and Al-Sammaliyyah Island; a tunnel between Al-Sammaliyyah Island and Bilrimaid Island; and a cut-and-cover (open) tunnel on Bilrimaid Island. Another tunnel will connect Bilrimaid Island to Um-Yifeenah Island.

    Abu Dhabi awarded three packages for phase one of the MIPP in 2024. The contract for Package 1A was awarded to a joint venture of Turkish contractor Dogus Construction and UAE firm Gulf Contractors. Package 1B was awarded to a joint venture of Yas Projects (Alpha Dhabi Holding) and China Railway International Group. Beijing-headquartered China Harbour Engineering Company and the UAE’s Agility Engineering & Contracting Company won the contract for Package 1C.

    Phase one starts at the existing Saadiyat Interchange, connecting the E12 to the MIPP, and ends at the recently constructed Um-Yifeenah Highway.

    It comprises a dual main road with a total length of 8km, including four traffic lanes in each direction, two interchanges, a tunnel and associated infrastructure works.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17704765/main.jpg
    Yasir Iqbal