- US companies’ entry into Libya will solidify Tripoli’s global oil market wild card role in stabilizing an already weary industry.
- American Chamber of Commerce in Libya (AmCham Libya) has partnered with Energy Capital and Power for the November 8-9 Libyan Energy and Economic Summit in Tripoli.
- Libya boasts of the greatest proven crude oil reserves in Africa totaling 48.4 billion barrels as of 2021.
A new partnership is promising to open doors for US energy companies in Libya, the frontier that is becoming the world’s oil market wild card. The move will further solidify the North African country’s oil industry’s pivotal role in stabilizing an already weary global energy market.
Libya’s oil market wild card status
While Libya is a member of the Petroleum Exporting Countries (OPEC) oil cartel, the country is enjoying oil market wild card status. Internationally, Libya is not bound by OPEC’s crude output caps due to its roiling political crisis. This means that companies in the country can extract and export as much oil as they deem fit.
What’s more, Libya’s close proximity to Europe means that it can ship its oil by sea using shorter routes than the competition. At the moment, Libya exports most of its oil to European nations, which have cut supplies from Russia.
With the Russia-Ukraine war raging for the second year, global energy markets have been experiencing high prices, further fueling inflationary pressures as Moscow—a big player in oil exports—remains under US sanctions.
As a counter to Russia’s invasion of Ukraine, the US, EU and UK banned all oil and gas imports from Moscow. A January report by Helsinki-based Centre for Research on Energy and Clean said Russia, the world’s largest exporter of oil, was losing about $176.8 million per day due to oil sanctions.
Libya had the greatest proven crude oil reserves on the continent as of 2021, totaling 48.4 billion barrels. The country, which is a member of the OPEC, has been steadily plugging the production gap. Apart from petroleum, Libya’s other natural resources are natural gas and gypsum. Its economy depends primarily on the oil sector.
AmCham Libya is excited by prospects
Major oil companies have been channeling big investments to develop the country’s energy industry. Already, big economies are moving to stave off any chance for an oil production dip in Libya that could leave global trade ruffled. And while at it, American companies look set to strike deals during the November 8-9 summit in Libya.
The American Chamber of Commerce in Libya (AmCham Libya) has partnered with Energy Capital & Power (ECP) for the Libyan Energy and Economic Summit (LEES) that will be hosted in Tripoli.
Debbie Hirst, President of AmCham Libya, said, “We are really happy that ECP is coming back to Libya this year. The 2021 event was extremely impactful in terms of sending a message to the international community that Libya was actively re-engaging. The second edition in 2023 shows that Libya continues on its positive trajectory and AmCham is excited to be part of it.”
“AmCham Libya plays a crucial role in facilitating business between US and Libyan companies. Through the summit, we believe that this will extend into various segments of the Libyan energy sector. Libya has always held and will continue to hold enormous opportunities for US companies. We look forward to supporting a new era of bilateral trade and commerce,” states James Chester, ECP Senior Director.
US firms to provide technology
US firms have historically played an important role in the growing Libyan energy sector. Today, major players including oilfield services providers Halliburton and Schlumberger, and industrial conglomerate General Electric (GE), are members of AmCham Libya. These US firms provide technology and best practices that advance the energy industry in Libya.
Strategically timed, LEES 2023 will serve to enhance US companies’ involvement in Libya. The forum will also offer investors and project developers the opportunity to expand into regional markets.
The summit is centered on partnerships and deals, and with its result-oriented approach, invites investors to enter the Libyan market.
Eni’s offshore gas fields
US companies will be joining forces with other oil majors already making huge investments in Libya’s energy sector.
Italy’s Eni entered into a deal with Libya’s National Oil Corporation (NOC) in January, investing about $8 billion in two offshore gas fields. Eni projects to produce about 850 million cubic feet per day from the plant in the Mediterranean Sea. Already, in a joint venture with NOC, Eni produces gas from Wafa and Bahr Essalam fields.
In April 2021, TotalEnergies agreed to continue production from Mabruk, Sharara, Waha, and Al Jurf oil fields by 175,000 bpd. The French giant also agreed to prioritize the development of the Waha-concession North Gialo and NC-98 oil fields. Data from NOC shows that the Waha concession has the capacity to produce about 350,000 bpd.
Globally, Libya is known for her high-quality light, sweet crude oil, including the Es Sider and Sharara export crudes. Her products are in demand in the Mediterranean and Northwest Europe for their gasoline and middle distillate yields.
Different political factions have, however, been complicating matters for the oil trade in Libya. In June, the head of the Libyan National Army (LNA) Khalifa Haftar send jitters in the energy markets. He ordered his forces to remain on standby until a fair distribution of oil wealth is agreed.
Haftar’s LNA is largely based in the North African country’s oil-rich eastern region. His order could see Libya’s oil output drop significantly, a move that would hit global markets hard.
Also Read: Italy, Libya sign US$8 billion gas deal as Meloni visits Libya
