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
  • Contractor appointed for Abu Dhabi Riviera residences

    1 July 2026

     

    Dubai-based real estate developer Mered has appointed Turkiye’s Sera Group as the main contractor for its Riviera Residences project on Al-Reem Island in Abu Dhabi.

    The development will comprise more than 400 one- to three-bedroom apartments and 11 villas.

    Lebanese engineering firm Dar Al-Handasah is the project consultant, while Switzerland’s Herzog & de Meuron is the architect.

    The enabling works are being carried out by local contractor NSCC International.

    Mered and Sera Group are also working together on the Iconic Tower project in Dubai Internet City, where the developer awarded the main contract in December 2024.

    The 67-storey tower is being built on a site covering about 6,368 square metres.

    Local firm Mirage is the project consultant, while Singapore-based Hirsch Bedner Associates is the project architect.

    Dubai-based Chawla Architectural & Consulting Engineers is the architect of record, and Omnium International is the quantity surveyor.

    The foundation works were carried out by local firm Dutch Foundations.

    Mered’s latest contract awards in the UAE market come amid heightened real estate and construction activity, with schemes worth more than $323bn at the execution or planning stages, according to UK-based analytics firm GlobalData.

    GlobalData forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms in 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17509888/main.jpg
    Yasir Iqbal
  • Siemens Energy to supply turbines for Oman IPP projects

    1 July 2026

    Germany’s Siemens Energy has announced it will supply power generation technology and long-term service agreements for the 2.6GW Misfah and Duqm independent power producer (IPP) projects in Oman.

    The scope includes the supply of six F-class gas turbines, six generators and 20-year long-term service agreements for the equipment.

    The combined-cycle gas-fired plants will add almost 20% to the sultanate’s electricity generation capacity. They are expected to provide electricity to more than two million people.

    Oman’s Nama Power & Water Procurement (Nama PWP) signed power-purchase agreements (PPAs) for the development and operation of the plants in January.

    The two combined-cycle gas turbine plants are being developed by a consortium comprising Korea Western Power (Kowepo), Qatar’s Nebras Power, the UAE’s Etihad Water & Electricity (EtihadWE) and Oman’s Bhawan Infrastructure Services.

    The Misfah IPP will be led by Nebras Power and located in Wilayat Bousher in Muscat Governorate, with a planned capacity of 1,600MW.

    The Duqm IPP will be led by Kowepo and located in Wilayat Duqm in Al-Wusta Governorate, with a capacity of 800MW.

    In May, MEED exclusively reported that a consortium of China-headquartered Shandong Electric Power Construction No. 3 Company (Sepco 3) and South Korea’s Doosan Enerbility had been appointed as the main contractor.

    The gas turbines will have hydrogen co-firing capability, providing flexibility to increase hydrogen use over time, Siemens said in a statement.

    The turbines will be manufactured at Siemens Energy’s facility in Berlin. The generators will be produced at the company’s plant in Muelheim, Germany.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506190/main.jpg
    Mark Dowdall
  • Qiddiya awards estimated $1bn racecourse deal

    1 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi gigaproject developer Qiddiya Investment Company (QIC) has awarded an estimated SR4.3bn ($1.1bn) contract for the construction of a racecourse at Qiddiya entertainment city, on the outskirts of Riyadh.

    The contract was awarded to Taj Dhabi, a local subsidiary of UAE-based Trojan Construction.

    The racecourse venue will cover 1.3 million square metres and accommodate 70,000 spectators.

    QIC issued the tender for the construction works in December last year, but formally announced the project only on 10 February. Contractors submitted their bids on 15 February, MEED previously reported.

    According to a statement published on QIC’s website: “The venue will include the region’s first straight-mile turf course, alongside a 2.2 kilometre (km) main turf track and a 2.4km inner dirt track.

    “A 21,000-seat grandstand will anchor the venue, with the ability to expand capacity to up to 70,000 guests through event overlays during major race days,” the statement added.

    A centrepiece of the venue will be a 110-metre central parade ring, located in the middle of the racecourse.

    The project also includes an equine hospital that will provide advanced veterinary services, including diagnostics, surgery, rehabilitation and emergency care for horses.

    The Qiddiya City horse racing venue is one of several major projects within the greater Qiddiya development. Other projects include an e-games arena, the Prince Mohammed Bin Salman Stadium, a motorsports track, a performing arts centre, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    GCC presses ahead with tourism projects

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506035/main.jpg
    Yasir Iqbal
  • NCP seeks firms for Saudi Arabia university hospital PPP

    1 July 2026

    Saudi Arabia’s Umm Al-Qura University, in collaboration with the National Centre for Privatisation & PPP (NCP), has launched an expression of interest for the completion of the construction and operation of the Umm Al-Qura University Hospital in Mecca.

    Issued to contractors on 30 June, the notice has a submission deadline of 21 July.

    The scope includes completing the remaining construction works, as well as the subsequent operation of the hospital.

    Upon completion, the hospital will have a capacity of 391 beds.

    The project will be delivered as a public-private partnership (PPP) under a design, build, finance, operate and maintain model.

    The contract duration is 30 years.

    The project is the latest healthcare project to be procured on a PPP basis in the kingdom. In June, MEED reported that Saudi Arabia’s Ministry of Health and NCP had awarded a PPP contract for the operation and management of the Sabic Specialised Behavioural Healthcare Hospital in Riyadh.

    That contract was awarded to SEH Healthcare, a consortium comprising local firms Specialised Medical Company (SMC Healthcare) and Health Gates Complex, and Germany’s Dr Ebel Fachkliniken.

    In a filing with the Saudi Exchange (Tadawul), SMC Healthcare said the total estimated project value is about SR3.8bn ($1bn).

    In January, Saudi Arabia launched a national privatisation strategy aimed at mobilising $64bn in private sector capital by 2030.

    Building on the privatisation programme first introduced in 2018, the strategy focuses on unlocking state-owned assets for private investment and privatising selected government services.

    In a statement, NCP said the strategy comprises 147 opportunities drawn from a broader pipeline of more than 500 projects across 18 sectors.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506381/main.jpg
    Yasir Iqbal
  • On-site work starts for $5.4bn gas project in Algeria

    1 July 2026

    On-site work has started for the $5.4bn gas project in Algeria’s Illizi South block, days after a key meeting between Algeria’s Oil and Gas Minister Mohamed Arkab and the chief executive of the Saudi company Midad Energy, Sheikh Abdulelah Bin Mohammed Bin Abdullah Al-Aiban.

    The total investment of about $5.4bn will be fully financed by Midad Energy, including approximately $288m allocated to the exploration phase.

    It is being developed in partnership with Algeria’s national oil and gas company Sonatrach.

    Structured under Algeria’s Hydrocarbon Law No. 19-13, the agreement spans 30 years, with a 10-year extension option. It includes a seven-year exploration phase.

    The initial exploration phase is worth $288m and will involve 2D and 3D seismic exploration as well as drilling more than 13 appraisal wells, according to a report by the local news service Algerie360.

    The second phase, with an investment value of approximately $5.1bn, will involve drilling approximately 60 wells and constructing four natural gas compression units.

    The project is projected to produce a cumulative total of 125 billion cubic metres of natural gas and 204 million barrels of liquid hydrocarbons over 30 years.

    This will include 103 million barrels of liquefied petroleum gas and 101 million barrels of condensate.

    Midad Energy has also stated its intention to further expand its investment in Algeria’s oil and gas industry and explore new joint investment opportunities with Sonatrach.

    Algeria’s president, Abdelmadjid Tebboune, signed a presidential decree ratifying the development agreement in March.

    Presidential Decree No. 26-113 was issued on 8 March 2026 and underpinned by Articles 91-7 and 141.

    It approved a contract signed in Algiers on 13 October 2025 between Sonatrach and Midad Energy.

    The contract granted both companies the rights to explore and exploit hydrocarbons in the Illizi South area. Algeria’s National Agency for the Valorisation of Hydrocarbon Resources (Alnaft) announced the contract award on 11 October 2025.

    The block is located about 100 kilometres south of In Amenas, which was raided by Al-Qaeda-linked terrorists in 2013, leading to a hostage crisis.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17505309/main.jpg
    Wil Crisp