Libya is moving to attract hundreds of millions of dollars in foreign investment as it prepares to award exploration and development licenses to international energy firms for the first time in over 17 years.
The North African country, a member of OPEC, aims to increase its oil production from about 1.4 million barrels per day (bpd) to 2 million bpd by 2030.
Major global oil companies, including BP, Chevron, ExxonMobil, TotalEnergies, Eni, Shell, and OMV, have qualified to participate in the new licensing round. The program covers 22 areas, 11 offshore and 11 onshore offering investors access to some of Libya’s largest oil and gas reserves, particularly in the Sirte Basin, which holds the majority of the country’s proven resources.
The government expects to finalize license awards by the end of February 2026, with over 30 companies competing for the contracts.
Analysts predict that the offshore blocks, particularly deepwater wells in the Sirte Basin, could attract investments exceeding $100 million per site.
Libya’s economy remains heavily dependent on hydrocarbons, which account for nearly 95 percent of exports and government revenue.
Expansion in the sector has supported strong economic growth, with real GDP projected to rise by 13.3 percent in 2025. By drawing foreign investment, Libya hopes to boost output while reinforcing overall economic recovery.
The country has updated its Production Sharing Agreement framework, increasing the potential internal rate of return for contractors from 2.5 percent to 35.8 percent to make investments more attractive.
This adjustment is expected to encourage participation from both major oil companies and smaller energy firms seeking high-reward opportunities.
Despite the potential, companies must navigate Libya’s security risks.
The country has previously shut down oilfields amid clashes between rival factions, including last year at the Al Sharara oilfield, the nation’s largest. Political instability has historically caused output to drop sharply, with production falling to 500,000 bpd in 2020.
Recent efforts to improve cooperation between Libya’s eastern and western administrations have helped stabilize output, though analysts warn that risks remain.
Libya’s proximity to Europe and its low-sulphur, easily refined crude make it a strategic supplier for European markets seeking alternatives to Russian oil. In 2023, about 78 percent of Libya’s crude exports went to Europe, primarily Italy, Germany, and Spain, with smaller volumes reaching Asia.
The country’s rising output could also influence global oil markets, as Libya has been exempt from OPEC+ production adjustments due to past instability. Analysts note that if production rises toward 1.6 million bpd or higher, it could complicate OPEC+ efforts to balance global supply, potentially requiring deeper cuts from other members to stabilize markets.
With its vast reserves, low production costs, and renewed investor interest, Libya is positioning itself to play a bigger role in global energy markets, while navigating the ongoing challenges of political risk and security.
