Libya Signs Production-Sharing Deal With Chevron for Area 106
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Libya’s National Oil Corporation (NOC) has signed a production-sharing contract with Chevron for Area 106, a 7,437-square-kilometre onshore exploration block in the Sirte Basin. The agreement formalises months of discussions between the two sides and follows Chevron’s selection as the preferred developer of the block in Libya’s first oil and gas licensing round in 17 years. The deal forms part of Libya’s plans to attract new investment and increase oil production to 2 million barrels per day by 2030. According to Libyan Express. Area 106 is located in the Sirte Basin, Libya’s main oil-producing region. The cooperation began in January, when Chevron signed a memorandum of understanding with the NOC to assess onshore exploration opportunities. Libya selected Chevron for Area 106 in February after its licensing round, in which five of the 20 blocks on offer were awarded.
Chevron’s cooperation with Libya has since expanded. In March, the company and the NOC agreed to examine offshore Block NC 146. They also launched a study in April covering unconventional oil and gas resources, including shale resources, across three sedimentary basins. The Area 106 contract now provides a formal framework for exploration and development of the block.
Chevron Deal Supports Libya’s Production Plans
The contract uses Libya’s EPSA-V production-sharing framework. Under the model, international companies carry the cost of exploration, while the agreement provides for cost recovery and profit sharing once commercial production is established. Libya currently produces about 1.5 million barrels of oil per day and wants to increase output to 2 million barrels per day by 2030. The NOC estimates that reaching the target will require about $40 billion in investment over several years.
This Chevron agreement is part of a wider effort to bring international capital and technical expertise into Libya’s upstream sector. A separate $20 billion agreement involving ConocoPhillips and TotalEnergies is focused on increasing production from existing assets, according to a Congressional Research Service report published in July. investment plans will depend on the operating environment and Libya’s ability to maintain stable conditions for long-term energy projects. The country continues to have competing political authorities, which has previously raised concerns around major oil and gas agreements.
