Oil Majors Return to Libya After a Decade Away

BP and Eni have returned to Libya after ten years of avoiding the country amid its civil war.

Per a statement by the National Oil Corporation of Libya, Italy’s Eni resumed exploratory drilling in the Ghadames Basin last weekend. The company operates the exploration block where it is drilling in partnership with BP and the Libyan Investment Authority—the country’s sovereign wealth fund.

The Italian major acquired half of BP’s 85% stake in the Ghadames Basin block back in 2018. At the time, the company planned to start drilling at the site soon after the acquisition but the unstable political situation in the country changed those plans, as blockades of the oil fields and the oil export terminals became standard practice among various political and paramilitary factions.

Earlier this year, Libya’s oil production was decimated after the country’s two governments locked horns over the appointment of a new central bank governor. Since the central bank handles Libya’s oil revenues, both governments wanted their own man at the top position. The eastern government, which controls most of Libya’s oil fields through affiliated armed groups, said production would be suspended until a compromise is found and promptly proceeded to carry out its threat.

As a result, Libya’s oil production dropped from over 1 million barrels daily to about 100,000 bpd for a short while, until the two governments shook hands on a new central bank governor. The events highlighted the fact Libya is still not the safest of locations for oil operators, yet this appears to no longer be the deterrent it used to be.

Two other Western energy majors are also returning to Libya, according to the NOC. Repsol, the Spanish operator, was preparing to start drilling in the Murzuq Basin in the coming weeks, and Austria’s OMV was also preparing for drilling in the Sirte Basin, the Libyan state energy company reported.