Does Libya’s 2025 Oil Licensing Round Meet Expectations?
Libya’s long-anticipated 2025 oil licensing round, the country’s first in nearly two decades, signifies a wake-up call for the National Oil Corporation. While the results highlight the complex road ahead for the upstream sector, the participation of several Tier-1 players suggests that Libya remains a focal point for long-term energy security in the Mediterranean.
Under the leadership of the NOC, the round saw 22 onshore and offshore blocks offered, attracting 44 applicants with 37 companies pre-qualified. By February 2026, the award of five strategic blocks marked a purposeful entry point for a diverse group of investors. Major winners included Chevron, Eni, QatarEnergy, Repsol, and TPAO. This mix of established incumbents and regional partners validates the NOC’s diligent efforts to maintain a diverse investment base during a period of global energy transition.
The lack of bidding however casts doubt on Libya’s ambitious production targets. Plans to increase output from roughly 1.4 million barrels per day (b/d) to 2 million b/d by 2030 now appear increasingly difficult to achieve. With so few new blocks moving forward, the country’s short-term production growth will largely depend on existing assets rather than new exploration.
Strategic Gains and Basin Highlights
The most notable success was Block S4 in the Sirte Basin, where Chevron’s entry signals a high-profile return of U.S. investment to Libya’s most prolific oil province. This move, alongside the Eni-QatarEnergy consortium’s win in offshore Block 01, suggests that for major players, the geological potential of Africa’s largest reserves remains a compelling proposition.
The licensing round also saw Turkey’s TPAO and Hungary’s MOL secure key positions. MOL’s entry is particularly noteworthy; it demonstrates that mid-sized independents view Libya as one of the few remaining regions offering large-scale conventional opportunities. Nigerian independent Aiteo also made history by securing onshore Block M1, marking its first venture outside Nigeria and highlighting the NOC’s success in fostering South-South cooperation.
Navigating the Transition
The gap between the blocks offered and those awarded should be viewed not as a lack of interest, but as a “flight to quality.” Investors are clearly prioritizing blocks with the most established infrastructure and clearest legal frameworks. The NOC has been proactive in this regard, revamping its Exploration and Production Sharing Agreement (EPSA V) framework.
Reported internal rates of return (IRR) have been optimized to roughly 20% (with some models reaching 35.8%), while the state take has been adjusted to a competitive 66%. These reforms directly address investor concerns regarding profitability and cost recovery. While some ambiguities remain around force majeure and stabilization clauses, the NOC’s willingness to modernize its fiscal regime shows a clear commitment to meeting the market halfway.
The licensing round is a central pillar of Libya’s broader energy reforms, which extend into downstream operations. By awarding tenders to Western majors like Vitol, Trafigura, and TotalEnergies, Libya has drastically reduced its reliance on Russian fuel imports, which plummeted to roughly 5,000 barrels per day in 2026 from 56,000 bpd in 2024.
This shift, supported by a $20 billion partnership with TotalEnergies and ConocoPhillips, aims to modernize the entire value chain. By integrating Mediterranean refineries, particularly in Italy, as key suppliers, the NOC is positioning Libya as a more reliable and transparent partner for European energy markets.
Looking Ahead: A Foundation for Incremental Growth
The 2025 licensing round serves as a vital calibration phase. While the NOC’s ambitious target of 2 million b/d by 2030 remains a challenging target, the corporation has demonstrated that it can still attract the world’s most sophisticated energy giants despite a fragmented political landscape.
The path forward will involve nurturing these new partnerships while preparing for a second bidding round. By securing commitments from the likes of Chevron and Eni, the NOC has provided a vote of confidence in the sector. The success of this round lies not just in the volume of blocks awarded, but in the caliber of the partners who have chosen to bet on Libya’s future. Moving forward, the focus will be on proving that these early movers can operate with the stability required to bridge the gap between current output and Libya’s vast, untapped potential.
