Libya has long been known for its oil. Since the first oil fields were discovered in the late 1950s, this “black gold” has underpinned the country’s economy, accounting for more than 95% of export earnings and public revenue.
On 21 June, Masoud Suleiman, chairman of the National Oil Corporation (NOC), announced that crude output had reached 1.44 million barrels per day, Libya’s highest level since 2013. The figure brought production close to the NOC’s strategic target of 1.5 million barrels per day.
As part of efforts to reopen the energy sector to foreign investment, Libya launched its first oil and gas exploration licensing round in March 2025 since 2007. In February 2026, it awarded contracts to several major international companies, including Chevron, Eni, QatarEnergy, Repsol, Hungary’s MOL, the Turkish Petroleum Corporation (TPOC), and Nigeria’s Aiteo. Earlier, in January, Libya signed a 25‑year agreement with TotalEnergies and ConocoPhillips to develop its oil sector. These developments signalled renewed confidence in Libya’s hydrocarbon potential despite persistent political divisions.
Washington’s renewed interest is also evident. Massad Boulos, the United States President’s adviser for Middle East and African affairs, told the Financial Times that the administration is pushing for Libya’s institutions to be unified under a single government while encouraging American companies to invest. “Our plan is to form a unified government and unify all Libyan institutions,” he said.
Despite rival governments and divided institutions, the NOC and oil revenues have remained the economic anchor on which all sides rely. Energy has effectively become Libya’s unwritten economic bond, helping prevent state collapse even as political actors fail to agree on almost everything else. And while Libya possesses Africa’s largest proven oil reserves (estimated at 48 billion barrels), there are signs that its largely untapped gas reserves could be just as competitive.
Untapped reserves
For decades, natural gas in Libya was treated largely as a secondary product used to power domestic electricity stations, while oil remained the country’s main source of revenue. But that began to change after Russia’s war in Ukraine reshaped global energy flows. Europe started seeking gas supplies that were closer, more secure and less exposed to geopolitical pressure, bringing Libya back onto the continent’s energy radar thanks to its location, its direct pipeline to Italy and its large untapped reserves.
Libya’s gas industry developed in stages, marked by three milestones: the production of associated gas from oilfields, the country’s entry into the ranks of gas exporters, and the rise of offshore gas and pipeline exports. The first stage began with the start of commercial oil production in 1961, when associated gas was extracted from oilfields. Most of it was used domestically or flared due to limited infrastructure and the absence of export markets.
A major milestone followed in the 1970s, when Libya built one of the world’s earliest liquefied natural gas plants at Marsa Brega, following similar ventures in Algeria and the United States. The plant processes associated gas from the Zelten, al‑Aqila, Laheeb and al‑Jabal fields, transported through a 170‑kilometre pipeline.
The decisive shift came in 2004, when the Western Libya Gas Project, developed by Eni in partnership with the NOC, entered commercial operation. The project included developing the offshore Bahr Essalam field and the onshore Wafa field, establishing the Mellitah processing and compression complex, and launching the Greenstream pipeline, which began delivering gas to Italy in October 2004. With an initial capacity of around 8 billion cubic metres per year, Greenstream made Libya a direct supplier of natural gas to Europe for the first time.
Libya’s proven natural gas reserves are estimated at 53 trillion cubic feet (1.5 trillion cubic metres), the fifth‑largest in Africa. Yet much of this resource remains underdeveloped due to years of political division, weak investment, and delayed exploration projects.
Another turning point
The year 2026 is now seen as another potential turning point, as a series of developments push Libya’s energy agenda more decisively towards gas. On 29 June, Eni, through its joint venture with the NOC, Mellitah Oil and Gas, announced the successful start of production, supported by the Sabratha Compression Project. The offshore project is designed to sustain and increase output from the Bahr Essalam field, located about 100 kilometres off the Libyan coast.
