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
  • UAE firm acquires majority stake in African power producer

    31 August 2026

    Abu Dhabi-based ePointZero has announced a deal to acquire a 90% stake in pan-African independent power producer Azura Power Holdings.

    The transaction will give the subsidiary of UAE investment group 2PointZero control of 752MW of operating power generation capacity across Nigeria, Senegal and Mozambique.

    The company will acquire the respective stakes held by existing shareholders Actis and Africa50 through an acquisition vehicle established with Amaya Capital, an Africa-focused investment firm based in London.

    Amaya Capital founded Azuro Power in 2010 and will retain a 10% minority stake in the company, which also has a development pipeline of more than 1.5GW of planned power projects.

    The pipeline includes expansions at existing sites, as well as new gas and renewable energy projects and battery energy storage systems.

    Azuro Power’s operating portfolio comprises the 461MW Azura-Edo power plant in Nigeria, the 116MW Tobene power plant in Senegal and the 175MW Central Termica de Ressano Garcia plant in Mozambique. The company’s operating assets generate around 10% of each country’s grid baseload power, the statement said.

    The company’s projects have received financing and support from development finance institutions including the World Bank, British International Investment, German Investment & Development Company, the US International Development Finance Corporation, the Dutch entrepreneurial development bank, the International Finance Corporation, the Multilateral Investment Guarantee Agency and France’s Proparco.

    The deal, subject to regulatory approvals and other customary closing conditions, marks ePointZero’s entry into African power generation and follows the acquisition of a 20% stake in Egypt’s Elsewedy Electric in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19171095/main.jpg
    Mark Dowdall
  • Contract award nears for Saudi Landbridge Riyadh section

    31 August 2026

     

    Saudi Arabia Railways (SAR) is preparing to award the main construction contract for the design-and-build of the Riyadh Rail Link, a new north-to-south railway line across the capital.

    MEED understands that the commercial proposals were opened two weeks ago, with a decision expected imminently.

    SAR began the post-tender clarifications with bidders in July, as MEED reported.

    The bidders include:

    • China Civil Engineering Construction Corporation / Al-Ayuni Investment & Contracting (China/local)
    • Nesma & Partners / China Harbour Engineering Company (local/China)
    • Al-Rashid Trading & Contracting / IC Ictas Construction / Saipem (local/Turkiye/Spain)
    • Saudi Binladin Group (local)

    In June, MEED exclusively reported that contractors submitted their commercial proposals on the 30th of that month.

    The scope includes a 35-kilometre double-track line connecting SAR’s North-South Railway to the Eastern Railway network.

    Issued on 29 January, the tender also covers the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility diversions/installations, signalling systems and other related works.

    Once delivered, the Riyadh Rail Link is expected to become a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements, and that the project would instead be delivered in several phases under a different procurement model.

    Negotiations have been under way between Saudi Arabia and China-backed investors interested in developing the scheme through a public-private partnership (PPP). Al-Malik put the project cost at about SR100bn ($26.6bn).

    Overall, it comprises more than 1,500km of new track. A core element is a 900km railway between Riyadh and Jeddah, providing the capital with direct freight access to King Abdullah Port on the Red Sea.

    Other key elements include upgrading the existing Riyadh-Dammam line, a bypass around the capital known as the Riyadh Link, and a connection between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. First announced in 2004, it was put on hold in 2010 before being revived a year later. Rights-of-way issues, route alignment and the high cost have been among the main stumbling blocks.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19161887/main.gif
    Yasir Iqbal
  • Prequalification begins for Dammam suburb boulevard PPP

    31 August 2026

    Saudi Arabia’s Ministry of Municipalities & Housing, in collaboration with Ashraq Development Company and the National Centre for Privatisation & PPP, has issued a request for qualification (RFQ) notice for the development of the King Fahd suburb boulevard project in Dammam.

    The notice was issued on 27 August, with a submission deadline of 22 October.

    The public-private partnership (PPP) project will be delivered using a design, build, finance, operate, maintain and transfer model, with a 43-year contract term.

    The project is located in Al-Bayda Governorate and features a 4 kilometre (km) mixed-use zone along a central boulevard, forming part of a larger 7.3km corridor.

    The project will be developed in two phases and span about 1 million square metres.

    According to a statement: “The private sector partner will be responsible for developing and operating the boulevard, which includes leisure and recreational facilities, public parks, entertainment venues, retail outlets, office spaces, hospitality zones, pedestrian walkways and road networks.”

    The project is the latest addition to the growing number of PPP projects in the kingdom. 

    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/19160560/main.jpg
    Yasir Iqbal
  • Contractors submit bids for Kuwait power transmission works

    31 August 2026

     

    Kuwait’s Public Authority for Housing Welfare (PAHW) has received bids for two tenders covering power transmission works at the South Saad Al-Abdullah residential development.

    The first tender covers the supply, installation and maintenance of 10 main 132/11kV transformer substations for the third phase of the development. 

    According to sources, five contractors submitted bids on 26 August. The local Sayed Hamid Behbehani & Sons made the lowest offer of $104.2m.

    The bids include:

    • Sayed Hamid Behbehani & Sons: $104.2m (Kuwait)
    • Industrial Electrical Projects (IEP): $111.5m (Kuwait)
    • Larsen & Toubro: $114m (India)
    • Oman National Engineering & Investment: $118m (Oman)
    • National Contracting Company: $126m (Saudi Arabia)

    The second PAHW tender covers the supply, installation and maintenance of 10 main 132/11kV transformer substations for the fourth phase of the project. 

    According to sources, five contractors also submitted bids on 26 August, with A-Ahleia Switchgear making the lowest offer of $103.3m.

    The bids include:

    • Al-Ahleia Switchgear: $103.3m (Kuwait)
    • Industrial Electrical Projects (IEP): $111.7m (Kuwait)
    • Larsen & Toubro: $114m (India)
    • Oman National Engineering & Investment: $118.3m (Oman)
    • National Contracting Company: $126m (Saudi Arabia)

    Both projects were initially tendered in May. As reported by MEED, PAHW previously issued addendums for both substation tenders, revising the qualification requirements for bidders.

    According to the revised requirements, contractors must be approved by Kuwait’s Ministry of Electricity, Water & Renewable Energy and have experience supplying and installing at least 10 132kV substations in Kuwait.

    The addendums also introduced requirements related to transformer and gas-insulated switchgear manufacturing approvals, as well as operational performance records for installed equipment.

    Sabah Al-Ahmad residential city

    Meanwhile, bids remain under evaluation for two 132kV underground cable tenders for the South Sabah Al-Ahmad residential development, tendered by PAHW in May.

    The first cable tender covers the supply, extension and maintenance of 132kV underground cables feeding eight main transformer substations serving the N1, N6 and N11 districts in the project’s fourth phase. 

    MEED previously reported that Egytech Cables, a subsidiary of Egypt’s Elsewedy Electric, was the lowest bidder with an offer of $42.37m.

    The second cable tender covers the supply, extension and maintenance of 132kV underground cables linked to substations serving the N5, N6, N8 and N10 districts in the project’s third phase. 

    Egytech Cables submitted the lowest offer of $39.95m. TBEA Shandong Luneng Taishan Cable submitted a bid of $41.89m, along with Riyadh Cables ($42.05m) and The Contractor General Trading & Contracting ($44.97m).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19151780/main.jpg
    Mark Dowdall
  • Eni plans to drill 230 oil and gas wells in Egypt

    31 August 2026

    Italy’s Eni is planning to drill 230 new oil and gas wells in Egypt, according to a statement from the country’s Ministry of Petroleum & Mineral Resources.

    Eni’s chief executive, Claudio Descalzi, discussed his plans for exploration and development in Egypt on 25 August during a meeting with Egypt’s Prime Minister Mostafa Madbouly and the Minister of Petroleum and Mineral Resources Karim Badawi.

    During the meeting, Descalzi said that the company has plans to drill 30 exploration wells in addition to 200 development wells.

    Descalzi said his company plans to intensify its exploration and development programmes, especially in the Mediterranean and Western Sahara regions, to increase production of natural gas and crude oil.

    He said that his company plans to use the latest seismic imaging and artificial intelligence technologies as a key part of its exploration and development plans.

    In a separate statement, Eni also said that it is working with UK-headquartered BP and state-owned Egyptian General Petroleum Corporation (EGPC) to reach a final investment decision (FID) for a project to develop the major gas discovery of Denise West in Egypt’s Temsah concession.

    Eni made the discovery in February and says it holds about 2 trillion cubic feet of gas and 130,000 barrels of condensate.

    It is targeting first gas in less than two years and expects to reach FID “in the next few months”, according to its statement.

    Eni’s total investments in Egypt have reached a value of $8.5bn, according to the statement from Egypt’s Ministry of Petroleum & Mineral Resources.

    During the meeting on 25 August, Descalzi also stressed the importance of linking Cyprus’ Cronos gas field to Egyptian export infrastructure.

    In July, Eni reached the FID to develop the Cronos project in deep waters offshore Cyprus, targeting the first Cypriot gas to market in 2028.

    Production is expected to reach a plateau of 500 million standard cubic feet a day.

    In October last year, Egypt and Cyprus signed provisional agreements to connect Cyprus’ Cronos gas field to Egypt’s gas infrastructure.

    The agreements were signed by parties including Egypt’s Ministry of Petroleum and Mineral Resources, Eni, and the French oil and gas company TotalEnergies.

    Connecting the Cronos field to Egypt is expected to involve the tendering of a major subsea pipeline project.

    This will allow gas to be transported and processed in existing Zohr facilities in Egypt, then transferred and liquefied at the Damietta LNG plant for export as LNG to international markets, primarily Europe.

    At the meeting on 25 August, Descalzi said the planned project to connect the Cronos field to Egypt will be considered a model for regional cooperation in the gas sector and will enhance Egypt’s status as a regional gas hub.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19079059/main.jpg
    Wil Crisp