Libya Looks To BP/Eni Deal To Unlock Upstream Investment

Libya’s recent crude output gains came despite ongoing unrest. Could an 8 October deal with BP and Eni facilitate the exploration necessary for future output growth?

Libyan crude output is at a five-year high of 1.2mn b/d, according to National Oil Corporation (NOC) chief Mustafa Sanallah. But such gains have been halting – only last month, two employees were killed in a jihadist attack on NOC’s Tripoli HQ.

The IOCs who operate the bulk of Libya’s upstream have made the modest investments needed to keep production flowing (local security permitting). But they have repeatedly stalled on capital-intensive exploration or development drilling. Such activity is not only pricey, it would dramatically increase their physical exposure to instability given the need for heavy machinery (eg rigs) and senior on-site staff, which for IOCs de-facto means expats. In recent years, on-site production workers have almost all been Libyans. (CONTINUED - 1042 WORDS)