Libya’s long-awaited oil and gas licensing round has produced a modest outcome, falling short of expectations that it would signal a strong revival of the country’s upstream sector.
The 2025 round, launched by the National Oil Corporation (NOC) in March last year, offered 22 onshore and offshore blocks, including 19 undeveloped discoveries. Early interest appeared robust. Forty-four companies and one consortium applied, and by July 2025, authorities had pre-qualified 37 firms.
However, when the NOC announced the results on February 11, 2026, it awarded only five blocks, two offshore and three onshore.
Limited Awards Despite Broad Interest
Major energy companies initially showed interest in the round. Among those pre-qualified were Eni, TotalEnergies, BP, Repsol, OMV, QatarEnergy, Shell, Woodside, Turkey’s TPAO, Russia’s Lukoil, India’s Indian Oil Company, and several Chinese firms, including CNODC.
Yet only a small group submitted final bids. Ultimately, Chevron, Eni, QatarEnergy, Repsol, TPAO, Hungary’s MOL, and Nigeria’s Aiteo secured acreage.
Chevron won the competitive onshore Block S4 in the Sirte Basin’s Waha area, marking a notable return to Libya after more than a decade. Repsol and TPAO jointly secured onshore Block C3 and, alongside MOL, obtained offshore Block 07. An Eni-QatarEnergy partnership won offshore Block 01, while Aiteo acquired onshore Block M1 in southwest Libya.
The sharp drop from early expressions of interest to final awards highlights investor caution despite Libya holding Africa’s largest proven oil reserves.
Political and Security Complexities Persist
Libya has restored oil production to roughly 1.3–1.4 million barrels per day (b/d), close to pre-war levels. However, the country’s political landscape remains divided.
The internationally recognized Government of National Unity (GNU) in Tripoli controls legal authority over contracts through the NOC. At the same time, eastern forces aligned with Khalifa Haftar’s Libyan National Army (LNA) maintain influence over several producing areas, particularly in the Sirte Basin.
Although a 2020 ceasefire reduced large-scale fighting, periodic clashes and political tensions continue. Investors must navigate both legal agreements with Tripoli and security realities on the ground. This dual structure adds operational risk and complicates long-term planning.
Contractual and Commercial Concerns
Legal uncertainty also weighed on investor appetite. Before 2011, Libya operated under the EPSA IV fiscal regime, which offered contractors a small share of the profit oil. While the 2025 round introduced improved commercial terms, reportedly including higher potential internal rates of return and a lower state take, some contractual provisions remained unclear during the bidding process.
Ambiguity around force majeure clauses, cost recovery mechanisms, and stabilization terms increased perceived risk, particularly in a politically fragmented environment.
The nature of the offered assets also influenced participation. Many blocks contained mature discoveries that require redevelopment rather than frontier exploration. Such projects typically attract smaller independent operators. However, the NOC’s qualification criteria favored companies with large reserve bases and production portfolios, limiting access for smaller firms that specialize in late-life asset development.
Production Targets Under Pressure
Libya aims to increase oil production to 2 million b/d and expand gas output by 2030. With only five blocks awarded, achieving that target will be more challenging.
Even the newly awarded acreage will require several years of exploration, appraisal, and development before contributing meaningful output. As a result, near-term production growth will depend primarily on investment in existing fields rather than new discoveries.
A Cautious Return, Not a Full Comeback
The licensing round reflects a selective re-engagement rather than a broad-based upstream resurgence. Companies already operating in Libya, regional players with strategic ties, and firms willing to accept elevated risk secured positions. Many global majors, however, opted not to proceed beyond the pre-qualification stage.
The NOC has signaled plans for a second licensing round. Its success will likely depend on clearer contractual terms, better alignment between asset types and eligible bidders, and sustained political and security stability.
Until those conditions improve, Libya’s substantial hydrocarbon reserves may remain constrained by structural and geopolitical challenges, limiting the pace of its production growth despite strong regional demand for diversified energy supplies.