BP and Shell strike new deals as oil majors return to Libya

BP and Shell have signed fresh agreements with Libya’s National Oil Corporation, marking a major step in the return of international energy giants to a country they largely avoided for nearly a decade.

BP has inked a memorandum of understanding (MoU) to assess restarting production at two large oil fields, while Shell’s MoU will explore potential oil and gas projects, Bloomberg reports.

The civil war that erupted in 2011 and resulted in the fall of Muammar Gaddafi plunged Libya into prolonged instability. Rival governments fought for control of the nation’s vast oil reserves, prompting most international companies to suspend operations in 2014.

However, the tide is turning. Last year, major players including Italy’s Eni, Spain’s Repsol, and Austria’s OMV resumed drilling in Libya. The country is now holding its first tender for exploration licenses since 2011, aiming to boost daily production from about 1.3 million barrels to 2 million barrels per day.

This renewed interest is driven by multiple factors, notably Europe’s push to reduce reliance on Russian energy. Libya’s large reserves, proximity to Europe, and historical ties to European energy markets make it an attractive option — even as political risks remain.

For now, oil majors appear willing to accept potential instability in exchange for access to Libya’s lucrative resources.