Chevron advances Libya return with new production-sharing deal

Libya’s National Oil Corporation has signed a production-sharing agreement with US energy major Chevron covering exploration acreage in the Sirte Basin, advancing one of the key awards from the country’s latest oil and gas licensing round.

The agreement, signed on Monday, 24 August, follows Chevron’s selection in February as the successful bidder for onshore Area 106, also designated S4, under Libya’s 2025 exploration bid round.

NOC Chairman Masoud Suleman said the agreement marked an important step towards the exploration and development of Libya’s hydrocarbon resources and would strengthen cooperation with major international energy companies.

The deal provides a contractual framework for Chevron to move forward with exploration activities in Area 106, a 7,437-square-kilometre acreage position in the Sirte Basin, Libya’s most prolific oil-producing region.

NOC data released for the bidding round identified a gas discovery within the area with estimated 2P reserves of about 100 million barrels of oil equivalent, alongside a number of additional exploration leads.

Chevron was named the winning bidder for the acreage on 11 February, marking its entry into Libya as part of the country’s first oil and gas exploration licensing round since 2007. The round also awarded acreage to international companies and consortiums including Eni, QatarEnergy, Repsol, Türkiye’s TPAO, Hungary’s MOL and Nigeria’s Aiteo.

The production-sharing agreement represents a further step in Chevron’s developing relationship with the Libyan upstream sector. The US company signed a memorandum of understanding with NOC in Tripoli in January to assess onshore exploration and development opportunities.

The two sides subsequently broadened their cooperation. In March, they agreed to undertake a technical assessment of offshore Block NC146, while a separate memorandum signed in April established a joint study of Libya’s unconventional shale oil and gas potential across the Sirte, Murzuq and Ghadames basins.

For NOC, the Chevron agreement forms part of a wider effort to bring international capital and technical expertise back into Libya’s upstream industry, expand the country’s reserve base and support plans to increase oil and gas production over the coming years.

Chevron’s progression from successful bidder to a formal production-sharing agreement also moves the 2025 licensing round into its implementation phase, as Libya seeks to translate renewed interest from international oil companies into exploration activity and, ultimately, new production.