The government of Libya has set up a special committee to review all oil, gas, and electricity contracts signed over the past five years to ensure they are aligned with national interests.
Local sources reveal on Tuesday that the six-member body, established by the Presidential Council, will examine agreements with both local and international companies to confirm their legality, transparency, and compliance with Libyan laws and regulations.
The committee “will ensure that contracting parties comply with Libyan laws, regulations and systems, without compromising national sovereignty,” says Libya’s Presidential Council, which fills the role of head of state in the country’s government of national unity.
Many foreign oil giants are returning to Libya to resume operations years after a civil war caused them to shut down their activities.
The audit committee is mandated to prevent any breach of UN Security Council sanctions.
The review will also evaluate the contracts’ impact on public interest, national revenues, and the country’s energy needs, as well as the creation of holding companies tied to these deals.
Petroleum accounts for over 90% of Libya’s national revenues and contributes around 60% to its GDP.
Fear of a potential diversion of oil revenue was raised in February, when a private Libyan company linked to the eastern faction exported crude oil worth at least $600 million.
That was the first time such an incident occurred in a country where oil exports are usually undertaken by the National Oil Corporation (NOC).
Audit comes amid sector rebound
The move comes as conflict-battered Libya seeks to revive its hydrocarbon sector, which has suffered from years of instability and declining production.
In July, the country launched its first oil and gas exploration tender in nearly 20 years. According to NOC, the exercise featured 22 new offshore and onshore blocks, drawing interest from 37 bidders.
Major bidders in the exercise include France’s TotalEnergies, Italy’s Eni, and US majors Chevron and ExxonMobil.
Earlier this month, ExxonMobil said it was exploring a preliminary agreement for natural gas development in offshore Libya, signaling its return to the country.
Aside from the American oil giant, other big companies like BP, OMV, Weatherford, and Repsol have also resumed oil and gas operations in Libya.
This massive return is already reflected in Libya’s oil output, which has spiked in recent months as several idle fields are being reactivated.
As of January, the country’s daily crude oil and condensate output had reached 1.4 million barrels, compared to 900,000 barrels in 2021.
However, Libya’s leadership is tightening oversight of existing agreements with the hope of restoring confidence in its energy sector and maximizing benefits from its vast oil and gas resources.
