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
  • Adnoc Onshore selects contractors for well tie-ins project

    27 October 2026

     

    Abu Dhabi National Oil Company’s onshore operating arm (Adnoc Onshore) has selected contractors for a major project to tie in wells across the Bab and North East Bab oil field developments in Abu Dhabi.

    Located 84 kilometres southwest of Abu Dhabi city, the Bab field has been in production since 1960 and is the emirate’s first oil-producing asset. The North East Bab cluster comprises the Al-Nouf, Rumaitha and Shanayel fields. 

    The Bab and North East Bab One Tie-In project is central to Adnoc Onshore’s contribution to Adnoc Group’s target of expanding crude oil production capacity to 5 million barrels a day (b/d) by 2027, an initiative known as the Accelerated Integrated Programme 5. The state energy company’s total production capacity currently stands at approximately 4.85 million b/d.

    According to industry sources, Adnoc Onshore has selected local contractor Robt Stone Middle East and China’s Jereh Group to carry out engineering, procurement and construction (EPC) works on the project. While both firms have been notified of their selection, a formal project kick-off meeting has yet to take place.

    Adnoc Onshore is understood to have started the tendering process for the Bab and North East Bab One Tie-In project last year, with contractors submitting technical and commercial bids earlier this year.

    Following the evaluation of bids, Adnoc Onshore sought best commercial offers from the bidders, which contractors submitted in May, MEED previously reported.

    The project budget is estimated at $1.2bn.

    Bidders for the contract are understood to have included:

    • Galfar Emirates (UAE branch of Oman’s Galfar Engineering & Construction)
    • Jereh (China)
    • Kalpataru Projects International (India)
    • Matrix Construction (UAE)
    • Robt Stone Middle East (UAE)
    • Target Engineering Construction Company (UAE)

    The project scope covers residual engineering, procurement of materials not supplied as free-issue items, site surveys, construction, installation, inspection, testing, and pre-commissioning and commissioning support. The works will deliver new wellsite facilities, including a new mini-pad, well bays and clusters across the Bab and North East Bab developments.

    Adnoc Onshore is Adnoc Group’s largest production subsidiary, accounting for roughly 2 million b/d of crude and about 7 billion cubic feet a day of associated gas from four primary onshore asset clusters: Bab, Bu Hasa, North East Bab and South East.

    ALSO READ:

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20951928/main.jpg
    Indrajit Sen
  • Ashghal tenders Al-Udeid air base access road works

    27 October 2026

     

    Qatar’s Public Works Authority (Ashghal) has invited contractors to bid on a contract to build roads and related infrastructure around Al-Udeid Air Base.

    The project is located in Zone 95 of Al-Wakra Municipality, adjacent to Al-Majd Road. 

    The tender was issued on 22 October, with a submission deadline of 22 November.

    The scope includes the construction of a dual-lane carriageway to improve access to the air base, together with three roundabouts. The alignment will connect to Al-Majd Road to the east and tie into Street 203 in Zone 95 to the west. The contractor will also resurface and maintain connections to the existing road network.

    Associated works include street lighting, intelligent transport systems, directional signage and a surface-water drainage collection system.

    The contractor will provide crossing ducts, protect and relocate conflicting existing utilities, and complete detailed utility designs as required by relevant stakeholders through the Qatar Design Review System.

    The project also includes the design and construction of two electrical substations. The contractor must secure the necessary stakeholder and authority approvals before starting these works.

    The scheme will be delivered on a remeasurable, build-only basis using designs approved by others. It will also include designated contractor-designed elements and design-and-build packages for the substations.

    Bidders must submit two commercial pricing options: a base offer subject to material price-fluctuation provisions, and an alternative authority option without such provisions.

    The contract has a 550-day completion period from the commencement date, including mobilisation, followed by a 400-day maintenance period after the completion certificate is issued.

    Participation is restricted to local and international contractors registered under the Ministry of Finance classification system in Grade A or Grade B for road specialisation.

    Unclassified foreign firms may submit equivalent certified documentation from their country of origin, attested by Qatari diplomatic missions. They must obtain Ministry of Finance registration before contract award.

    For joint-venture bids, the lead partner must hold the required classification grade.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950810/main.jpg
    Yasir Iqbal
  • Saudi Arabia gauges interest for Al-Ula wastewater expansion

    27 October 2026

     

    Saudi Arabia’s Royal Commission for Al-Ula (RCU) is conducting market sounding for the first phase of the Mughayra wastewater treatment plant (WWTP) expansion before formally starting its tendering process, according to industry sources.

    The project is valued at SR400m ($107m) and is intended to increase the Mughayra plant’s wastewater treatment capacity to 62,000 cubic metres a day.

    RCU is gauging interest from potential contractors and has not yet issued a prequalification questionnaire, a source said.

    The scheme forms part of Saudi Arabia’s broader investment drive to develop its cultural and tourism offering across Al-Ula.

    The commission launched its Journey Through Time Masterplan in April 2021, with implementation scheduled in three phases through 2035. The masterplan covers infrastructure development, water management and irrigation, alongside the regeneration of a 9-kilometre cultural oasis.

    French engineering firm Artelia previously noted in its 2025 annual corporate report that it is involved in the design phase of the Mughayra WWTP.

    RCU is also developing strategic potable-water storage infrastructure in Al-Ula, including a design-and-build project covering a 50,000-cubic-metre reservoir at Hub 06 and a 15,000-cubic-metre reservoir at Hub 08.

    Local contractor Bin Omairah previously confirmed that it is serving as the engineering, procurement and construction contractor for the storage facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950333/main.jpg
    Mark Dowdall
  • Qatari firm wins $147m Syria road deal

    27 October 2026

    Qatari contractor Al-Mohannadi for Roads, Trading & Contracting has signed a $147m contract with Syria’s General Directorate of Roads to rehabilitate and expand a 215-kilometre (km) highway corridor connecting to the Iraqi border.

    The project covers the rehabilitation and dualisation of a 170km section linking the Al-Busairi junction to the Al-Tanf border crossing, alongside the construction of a 45km link between the Al-Sabaa Biyar junction and Al-Busairi. Work is scheduled for completion within 900 days.

    The agreement was signed in Damascus by Moaz Najjar, director-general of the General Directorate of Roads, and Abdullah Adnan Al-Zattam, chief executive of Al-Mohannadi, in the presence of Syrian Transport Minister Yarob Badr and Finance Minister Mohammad Yusr Barnieh.

    The upgrade is intended to restore and expand one of Syria’s primary overland arteries to Iraq, which has suffered significant deterioration and capacity bottlenecks following years of conflict. The Al-Tanf corridor represents the most direct overland link between Damascus, central Syrian industrial centres and Baghdad.

    The project is designed to accommodate heavier commercial freight vehicles and reduce transit times between the two countries.

    The investment also forms part of broader efforts to re-establish Syria’s role as a regional transit corridor connecting Mediterranean ports with landlocked trade routes into Iraq and the wider region.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950332/main.gif
    Yasir Iqbal
  • Adnoc showcases $16.3bn local manufacturing potential

    27 October 2026

    Abu Dhabi National Oil Company (Adnoc Group) has identified more than AED60bn ($16.3bn) in local manufacturing opportunities through 2030.

    The Abu Dhabi energy company also announced changes to its procurement, supplier registration and In-Country Value (ICV) localisation frameworks.

    The measures were announced at the second Make it with Adnoc Forum, held in Abu Dhabi on October 25. They are intended to give manufacturers, suppliers and investors greater visibility of future demand and a faster, clearer route to compete for Adnoc contracts, the company said.

    The more than 200 manufacturing opportunities cover products required for Adnoc’s projects and operations, including:

    • Rotating equipment and power
    • Electrical, control and automation systems
    • Drilling and completion equipment
    • Chemicals and catalysts
    • Piping, fabrication and heavy equipment
    • Spare parts and advanced manufacturing

    Many of the identified products are currently imported, Adnoc said. “Manufacturing them in the UAE shortens lead times, reduces exposure to global supply disruptions and strengthens the resilience of Adnoc’s operations,” it said in its statement.

    Adnoc, the UAE Ministry of Industry & Advanced Technology and the Abu Dhabi Investment Office (Adio) will work together to connect manufacturers with these opportunities. The collaboration will combine visibility of Adnoc’s demand, access to the national industrial database and financing through the National Industrial Resilience Fund, the company said.

    Adnoc also signed two memorandums of understanding on the sidelines of the forum with Adio and Kezad Group.

    ICV scheme expansion

    Adnoc announced the expansion of its Local+ programme, part of its ICV framework, to more than 100 UAE manufacturers, compared with 70 at its launch in May. The programme gives UAE-made products priority in Adnoc projects by requiring engineering, procurement and construction (EPC) contractors bidding for new tenders to source relevant products from manufacturers approved under the programme.

    Separately, Adnoc announced a redesign of its supplier registration and prequalification process. The company is targeting a reduction of up to 80% in the time required for suppliers to complete the process and become eligible to compete for Adnoc opportunities.

    The new model halves the number of required documents and removes prequalification requirements for 60% of service categories.

    A single window brings together registration, qualification and compliance, with requirements tailored to the nature of the work and its level of risk. Artificial intelligence will support document verification and the reuse of existing data, reducing repetitive submissions and administrative processing.

    ALSO READ:
    Adnoc steps up crude oil capacity expansion
    Adnoc funnels billions into boosting gas processing

    “Adnoc’s enhanced ICV model will more closely connect procurement decisions with commercial value and suppliers’ contribution to the UAE economy. Under the new model, commercial and ICV offers will be integrated into a single evaluation model,” the company said.

    “The previous bid-matching approach will be retired, encouraging suppliers to submit their most competitive commercial and ICV offers from the outset. Requirements will be proportionate to contract size and scope.

    “The model also enhances the administration of ICV-related retention payments. Where retention applies, automated calculation and release processes through the Adnoc Supplier Hub will improve transparency, reduce manual follow-up and support suppliers’ cash flow as obligations are met.”

    Alongside the ICV and registration enhancements, Adnoc outlined a new commercial approach built around four strategic shifts: agile, competitive, strategic and forward-looking.

    “The approach will advance simpler procurement and faster decision-making, contracting models aligned with project and market dynamics, targeted commercial negotiations and earlier visibility of Adnoc’s future demand.”

    Since its launch in 2018, Adnoc’s ICV programme has directed more than AED307bn ($83.6bn) into the UAE economy, the company said. By the end of 2025, it had also supported the localisation of more than 130 products, the development of 95 UAE factories, and employment opportunities for more than 27,500 Emiratis at participating private sector companies.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20948385/main5518.jpg
    Indrajit Sen