In a stunning move Western nations are once again looking to enter Libya for oil. This time in perhaps a more entrepreneurial way by going through the permission of the local authorities, or so it seems.
Libya has now opened the doors to its vast untapped oil and gas reserves by launching its first international licensing round since 2007. The move has drawn significant interest from Western energy giants, marking a potential turning point for a country rich in hydrocarbons but long plagued by instability.
Since the 2011 NATO-led intervention during Libya’s civil uprising, which led to Gaddafi’s overthrow, reignited tensions. While Western powers supported the revolution diplomatically and militarily, Libya has since struggled to establish stable governance, and foreign relations have remained uneven. It looks like it is now opening up for international business as well as for Western conglomerates.
Among the companies vying for exploration rights are U.S. multinationals ExxonMobil and Chevron, alongside France’s TotalEnergies, all of which are participating in a competitive bid for 22 onshore and offshore blocks. In total, over three dozen international firms have expressed interest, signaling renewed confidence in Libya’s energy sector.
Libya’s Energy Potential
Libya holds Africa’s largest proven oil reserves, estimated at 48 billion barrels, and possibly up to 90 billion barrels with further exploration. Additionally, the country sits atop an estimated 122 trillion cubic feet of natural gas. Despite this enormous potential, years of civil unrest have left much of it underdeveloped.
Today, Libya produces around 1.4 million barrels of oil per day (bpd). However, the National Oil Corporation (NOC) has laid out ambitious plans to raise production to 2 million bpd by 2030, and potentially even reach 3 million bpd in the longer term.
Inviting western nations for bids is another major move as Libya’s relationship with Western nations has been deeply complex and often turbulent.
During the Cold War, Libya under Muammar Gaddafi aligned itself with anti-Western and revolutionary ideologies, nationalizing Western oil assets in the 1970s. Tensions escalated in the 1980s, culminating in U.S. airstrikes on Tripoli and Benghazi in 1986 after Libya was accused of sponsoring terrorist attacks.
Libya remained largely isolated from the global economy for over a decade, especially under U.S. and UN sanctions imposed for its alleged involvement in the 1988 Lockerbie bombing.
A thaw began in the early 2000s when Libya renounced its weapons of mass destruction program. This led to a normalization of relations with the West, and major oil companies such as BP, Shell, Total, and Eni began re-entering the Libyan market.
However in 2011 a NATO backed campaign ousted Gaddafi. Libya has since been in tremendous upheaval and from being a stable growing nation it has become a turbulent one.
Over the past decade, foreign oil firms have maintained a cautious presence, often pulling out or reducing staff during flare-ups of violence.
Now, with the 2025 licensing round, Libya appears to be seeking a new chapter—one focused on economic partnership rather than political conflict.
The Risks of Trusting the West
While Western investment offers Libya a path to economic recovery and global reintegration, there are legitimate concerns about relying too heavily on Western oil majors and governments. These concerns are rooted in historical precedent and ongoing geopolitical realities:
Many Libyans continue to view the 2011 NATO intervention as a betrayal. What began as a humanitarian mission ended in Gaddafi’s death and the collapse of central authority.
This legacy fuels suspicion that Western involvement often serves foreign strategic interests more than Libyan sovereignty.
In past decades, Western oil contracts have been criticized for favoring foreign companies with minimal long-term benefits for local communities. Without strong oversight, Libya risks signing deals that enrich elites and multinationals while leaving national infrastructure and public services neglected.
For Libya relying on foreign firms may also invite foreign security contractors or military influence under the guise of protecting assets. This risks escalating internal tensions, especially if one faction perceives foreign backing for another.
Tripoli could also risk becoming a pawn in broader East-West energy rivalries. Increased Western presence might alienate potential partners like Russia, China, or regional players such as Turkey and Egypt, limiting Libya’s strategic autonomy.
Western firms have a history of pulling out rapidly when conditions become difficult. In past years, companies have suspended operations at short notice, leaving projects stalled and local workers unemployed. This unpredictability undermines development.
Western nations come in
Despite the huge risks, according to NOC Chairman Massoud Seliman, international roadshows were conducted earlier this year in Texas, London, and Istanbul to showcase Libya’s exploration blocks, which are estimated to hold at least 2 billion barrels of oil equivalent.
The licensing round is being offered under a Production Sharing Agreement (PSA) framework. Under this model, companies are expected to fund seismic surveys and drilling operations upfront. If discoveries are commercially viable, companies can recover their costs and share in the profits. Some analysts suggest the terms could offer internal rates of return of around 35.8%, making the deals particularly attractive despite the risks.
For Western nations, this is a chance to secure new energy sources and deepen regional influence. For Libya, it could mean revenue, jobs, and international recognition. However, caution is warranted.
To protect its sovereignty and long-term interests, Libya must:
Insist on transparent, equitable contracts,
Diversify its energy partnerships beyond just Western firms.
Build domestic capacity in the energy sector,
And avoid repeating the overreliance on external actors that led to past exploitation and instability.
Libya’s return to the global energy stage is a gamble with high stakes. If handled wisely, it could unlock a new era of prosperity. But if old patterns of foreign dependence and internal division persist, the country risks repeating the mistakes of the past, previously Libya was an upcoming nation, but with continuous setbacks it has been a nation in turmoil so the stakes are even higher for the African country. It must be meticulous and make decisions that does not compromise it but also help its economy.