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
  • Building resilience into infrastructure delivery

    21 October 2026

     

    The regional disruptions earlier this year tested Gulf supply chains, challenging the movement of goods and construction materials and raising questions about the ability of infrastructure programmes to maintain momentum.

    For the UAE Ministry of Energy & Infrastructure, the experience reinforced the importance of the systems that support project delivery, from transport networks and customs procedures to domestic manufacturers and international suppliers.

    “The disruption reinforced an important principle: infrastructure resilience is ultimately about the ability of the national system to continue operating under pressure,” says Mohammed Al-Mansoori, undersecretary for infrastructure and transport affairs.

    Supply resilience

    The ministry worked with ports, customs authorities, transport and rail operators, contractors, suppliers and the private sector to maintain the flow of essential goods and construction materials. It monitored critical materials and project schedules, identified alternative sources and adjusted procurement and delivery arrangements.

    The response included movement exemptions and facilitation measures for more than 6,600 lorries, while rail freight operations increased from approximately one journey a week to as many as seven journeys a day. Priority and green corridors were activated, customs procedures facilitated and critical shipments prioritised at ports.

    According to Al-Mansoori, these measures contributed to an estimated 25% reduction in transport costs, a 40% improvement in customs clearance times and an increase of approximately 15% in port capacity during the response period.

    For infrastructure projects, the ministry worked with local manufacturers and suppliers to identify alternative sources of road and construction materials meeting the required technical specifications and quality standards. This helped reduce reliance on disrupted international supply routes and support ongoing projects.

    The experience also highlighted the value of existing coordination mechanisms and partnerships.

    “It also reinforced a fundamental principle: resilience means ensuring that critical infrastructure delivery does not depend on a single supplier, a single route or a single mode of transport,” Al-Mansoori says.

    The ministry is planning to build on this experience by diversifying suppliers, strengthening domestic manufacturing and improving supply-chain monitoring.

    Resilience is increasingly being incorporated into procurement planning. For critical materials and services, the ministry aims to identify risks early, broaden the pool of qualified suppliers and ensure viable alternatives are available.

    The approach supports the UAE’s wider industrial objectives, including the national in-country value programme, which seeks to direct a greater share of procurement expenditure into the national economy.

    “Our objective is not simply to purchase more locally. It is to help create competitive national supply chains,” Al-Mansoori says.

    Domestic suppliers must be able to meet the technical requirements, quality standards and volumes demanded by major infrastructure programmes. Localisation is therefore about developing competitive industrial capabilities while shortening supply chains, improving responsiveness and encouraging investment.

    “Localisation is not simply a procurement choice; it is an investment in national capability and long-term resilience,” Al-Mansoori says.

    The ministry is also working with contractors to manage pressures from fluctuating material, insurance and transport costs. Its approach combines commercial discipline with early engagement to prevent external pressures from affecting project delivery.

    “Our approach is based on early engagement, transparency and disciplined commercial management,” Al-Mansoori says. “Long-term infrastructure delivery depends on strong contractors as much as it depends on strong contracts.”

    Contractors remain responsible for normal market and contractual risks, but the ministry seeks to assess exceptional pressures objectively, supported by evidence of their impact on costs and schedules. Realistic planning, early procurement and proactive risk management also help maintain momentum.

    “The objective is to strike the right balance between protecting the government’s commercial interests and securing best value for money, while maintaining an efficient, sustainable contracting market capable of continuing to deliver strategic infrastructure projects,” Al-Mansoori says.

    Resilience means ensuring that critical infrastructure delivery does not depend on a single supplier, a single route or a single mode of transport

    Project delivery

    The ministry’s focus on measurable outcomes is reflected in the Emirates Road enhancement project, which involves widening approximately 25 kilometres of Emirates Road from three to five lanes in each direction, alongside major improvements to Interchange No. 7.

    The works are expected to increase road capacity by up to 65% and reduce journey times by up to 45%.

    The project illustrates the ministry’s emphasis on assessing infrastructure by the benefits it delivers, rather than simply the scale of construction.

    “Infrastructure success should be measured by the value it creates – not just by the kilometres we build,” Al-Mansoori says.

    That principle is increasingly important as the UAE balances new construction with the long-term costs of operating and maintaining its assets. Decisions made during planning and construction can influence maintenance requirements, operating costs and performance for decades.

    For Al-Mansoori, resilience, domestic capability and effective delivery are closely connected. Stronger local supply chains can reduce exposure to external shocks, while closer engagement with contractors can help projects withstand cost pressures. 

    Don’t miss MEED’s MENA Construction Summit 2026, taking place under the patronage of the UAE Ministry of Energy & Infrastructure
     Secure your place as an attendee or request the sponsorship deck by clicking here or emailing us at meedevents@meed.com

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20810056/main.gif
    MEED Editorial
  • Riyadh tenders Expo 2030 Adaptation and Innovation Pavilion

    21 October 2026

     

    Register for MEED’s 14-day trial access 

    Expo 2030 Riyadh has tendered the design-and-build main contract for the Adaptation and Innovation Pavilion in the exhibition’s Technology District.

    The pavilion will be built on a plot of at least 12,710 square metres and will feature a two-level basement, ground-level public areas, an elevated skywalk, visitor experience areas, food and beverage outlets, retail space, VIP facilities, offices, back-of-house areas, exhibition spaces, an amphitheatre and a resonance hall.

    The facility is being designed to accommodate a minimum of 20,000 visitors a day at peak periods, with an anticipated average of about 15,000 visitors a day. The project targets LEED Gold certification.

    The tender was issued on 1 October, with bids due on 6 January 2027.

    The design-and-build contractor will be responsible for completing, reviewing, verifying, coordinating and technically integrating the design, including specialist contractor design portions and coordination with the novated lead design consultant.

    The scope includes completing early works and substructure activities, including grading, bulk earthworks, excavation, cut and fill, soil improvement, raft foundations, reinforced-concrete basement walls, basement columns through to the ground-floor slab, waterproofing, mechanical, electrical and plumbing (MEP) provisions, and backfilling.

    The contractor will also deliver the superstructure and building envelope, including structural works, facade engineering and installation, roofs, waterproofing, external finishes, and permanent facade access and maintenance systems. The internal works will cover front-of-house and back-of-house areas, public and core spaces, internal finishes, fixtures, fixed fittings, joinery, circulation areas, lobbies, stairs, toilets, storage, waste areas and associated builder’s works.

    The building services package includes MEP systems, information and communications technology, extra-low-voltage systems, building management systems, security, fire and life safety systems, specialist lighting and vertical transportation.

    The contract also covers the visitor experience package, including procurement, installation, integration, testing, commissioning and handover of visitor-facing environments, media, immersive and audiovisual technologies, interactive elements, experiential lighting, digital content, interpretive and wayfinding systems, controls and supporting infrastructure.

    Within-plot infrastructure and utilities, landscaping, public realm works, paving, planting, irrigation, signage, street furniture, drainage, stormwater systems, external lighting, security, and fire and life safety systems are also included.

    The contractor will be responsible for procurement, off-site fabrication, construction, testing and commissioning, performance verification, training, operations and maintenance documentation, operational readiness, handover, defects rectification and close-out.

    The main works tender is based on a 60% RIBA Stage 3 design, with the Stage 3 design to be completed to 100% through an addendum.

    Early works and substructure works, as well as the lead design consultant, will be novated to the contractor. Visitor experience works are included as a provisional sum.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20801465/main.jpeg
    Yasir Iqbal
  • Mubadala Bio lands Lilly logistics deal

    21 October 2026

    Mubadala Bio, the life sciences subsidiary of Abu Dhabi state investor Mubadala Investment Company, has signed an agreement with US drugmaker Eli Lilly to localise the packaging and logistics of Lilly’s glucagon-like peptide-1 (GLP-1) medicines in Abu Dhabi.

    The work will take place at a 125,000-square-metre site in Khalifa Economic Zones Abu Dhabi (Kezad), which includes packaging and warehousing facilities. Mubadala Bio said the facilities would strengthen its pharmaceutical contract manufacturing, packaging and logistics capabilities and its ability to serve international clients from the UAE.

    The packaging and logistics activities will be introduced in phases and will be subject to technical, quality and regulatory requirements. The companies did not disclose the value of the agreement or a timeline for the first phase.

    The Emirates Drug Establishment approved Lilly’s oral GLP-1 drug Foundayo (orforglipron) for chronic weight management in April. The companies said this made the UAE the second country in the world to register the medicine.

    In Abu Dhabi, the treatment is available to eligible patients under a weight management programme launched by the Abu Dhabi Department of Health and the Abu Dhabi Public Health Centre in June 2025. The UAE was also an early launch market for Lilly’s injectable treatment Mounjaro (tirzepatide) in August 2022.

    Mubadala launched Mubadala Bio in 2025 to expand domestic drug manufacturing and distribution, with a focus on national drug security. It is one of Mubadala’s designated national champions, set up to support strategic sectors. At launch, its combined facilities covered 110,000 square metres, with an annual capacity of more than 2.5 billion tablets and capsules and 120 million intravenous and injectable units.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20801279/main.jpg
    Colin Foreman
  • Chinese/local joint venture wins Qiddiya stadium facade

    21 October 2026

    Register for MEED’s 14-day trial access 

    A joint venture of China’s Fangda Group and Saudi Arabia’s IKK Group has secured a SR1.15bn ($306m) contract to deliver curtain wall facade works for the Prince Mohammed Bin Salman Stadium in Qiddiya City, Riyadh.  

    The contract was awarded by the joint venture of Spain’s FCC Construccion and local contractor Nesma & Partners, which is building the stadium under an estimated SR15bn ($4bn) main contract awarded by Qiddiya Investment Company (QIC) in October 2024.  

    The IKK-Fangda joint venture will design, supply and install curtain wall façade systems for the main stadium (Lot 1), as well as for the museum and ancillary buildings (Lot 3).

    The contract has an execution period of 863 days.  

    The stadium will seat about 47,000 spectators and will be the home ground for Saudi Pro League clubs Al-Nassr and Al-Hilal.

    The facade award follows the appointment of Elegancia Arabia, a subsidiary of Qatar-based Elegancia MEP and Estithmar Holding, to deliver the stadium’s mechanical, electrical and plumbing works.

    The SR829m ($221m) contract is Elegancia Arabia’s largest award in Saudi Arabia to date.

    The project is being designed by US-based consultant Populous.

    It is among the venues planned for the 2034 Fifa World Cup and will also host the Saudi King Cup, the AFC Asian Cup and the 2034 Asian Games.  

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20799367/main.jpg
    Yasir Iqbal
  • Zamil Steel wins $82m Qiddiya tennis centre contract

    21 October 2026

    Advanced Building Industries Company (Senaat) has announced that its subsidiary, Zamil Structural Steel Company (Zamil Steel), has secured a SR308m ($82m) contract for the National Tennis Centre in Qiddiya City, Riyadh.  

    The 19-month contract was awarded by the joint venture of France’s Bouygues Batiment International and local contractor Almabani General Contractors Company.  

    Zamil Steel’s scope includes the fabrication, supply and installation of structural steel and external facades for the scheme.   

    MEED reported in June that the Bouygues Batiment International-Almabani joint venture had started construction of the National Tennis Centre.  

    The development will include 30 tennis courts, comprising 28 hard courts and two clay courts. The main Centre Court will seat 15,000 spectators and feature a retractable roof.

    The facility is being designed to meet standards set by the Association of Tennis Professionals, the Women’s Tennis Association and the International Tennis Federation.  

    The development will also include an 8,000-seat multipurpose arena with a retractable roof, known as Court 3. Other facilities include a 5,000-seat Court 1, a 2,000-seat Court 2, six competition courts, six indoor courts and 14 practice courts. Each outdoor match court will provide 450 seats.  

    Total seating capacity across the complex will be 33,000. US-based architect Populous designed the project.  

    Qiddiya Investment Company officially announced the project on 15 June. The developer has said the centre will be the region’s largest tennis complex and will host international tennis events.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20799055/main.jpg
    Yasir Iqbal