BP, Shell sign Libyan oil field revival pacts

Libya's National Oil Company has signed agreements with BP and Shell, aiming to increase their role in the country's oil and gas output recovery, the companies said.

BP said July 8 that it had signed a memorandum of understanding to evaluate options for redeveloping the giant Sarir and Messla onshore fields in the Sirte basin, as well as assessing potential unconventional oil and gas development. The agreement "provides a framework for BP to assess a range of technical data and to effectively work with NOC to evaluate presented opportunities and determine the feasibility of future development and exploration programs," BP said.

William Lin, BP's executive vice president for gas and low carbon, said the agreement "reflects our strong interest in deepening our partnership with NOC and supporting the future of Libya's energy sector. We look forward to conducting thorough studies, working closely with NOC, to evaluate the resource potential of this promising region."

At a signing ceremony in Tripoli, NOC chairman Masoud Suleman expressed hope that BP would "soon engage effectively in Libya and ... play a greater and more significant role in developing the country's oil sector."

Shell also signed an agreement July 7 "to evaluate hydrocarbon prospects and conduct a comprehensive technical and economic feasibility study to develop the al-Atshan field and other fields fully owned by the NOC," according to the latter company. Al-Atshan is located in the Illizi basin in the west of the country near the Algerian border.

"We can confirm that Shell has signed an MOU with the Libyan National Oil Company to study potential opportunities in the country's oil and gas sector," a Shell spokesperson said.

Rocky history

Like the rest of the industry, BP has had patchy activity in Libya through the upheaval of the last decade and a half. It signed an exploration and production sharing contract with the Moammar Qadhafi government covering onshore and offshore areas in 2007, but this was put on hold as violence gripped the country and Qadhafi was toppled in 2011. BP then farmed out half of its production-sharing contract stake to Italy's Eni in 2022, resuming some onshore exploration in 2023.

Announcing the latest agreement, BP noted its similar agreement to help Iraq redevelop mature oil fields in the Kirkuk region, finalized in February.

NOC has set a target of reaching 1.6 million b/d of production in 2026 and 2 million b/d by 2030, in a bid to revamp Libya's oil-dependent economy.

The country remains prone to armed conflict and industrial strife, but its oil output reached a 12-year high in May of 1.23 million b/d, according to the Platts OPEC+ Survey from S&P Global Energy.

Platts, part of Energy, last assessed the flagship Es Sider crude grade at a $1.20/b premium to the Dated Brent benchmark on July 7.