Global Platts reported on Tuesday that international oil companies are once again stepping up activity, but production gains will depend on political stability. The return of U.S. major Chevron to Libya comes at a time of escalating conflict across the Gulf.
The website noted that Libya is targeting an increase in oil production from 1.5 million barrels per day to 2 million barrels per day, a goal that will require investment in existing fields as well as the development of new resources.
The website added that Houston-based Chevron signed an exploration and production-sharing agreement last month covering Area S4 in the Sirte Basin, following an international bidding round held in 2025. The agreement is part of a broader Libyan effort to bring international oil companies back into its upstream sector after years of underinvestment and disruption.
However, realizing Libya’s reserves and geographic advantages will likely require sustained government efforts to create greater political certainty and predictability in an industry that has faced severe security challenges since the overthrow of Muammar Gaddafi in 2011.
Return to Libya
According to the British website, Chevron first entered Libya in 2004, following the lifting of sanctions, but relinquished its exploration licenses in 2010 after unsuccessful drilling operations.
The website confirmed that the company’s return began to take shape last year, when the U.S. company held talks with Libya’s National Oil Corporation (NOC) regarding potential exploration and production opportunities. In January, Chevron signed a memorandum of understanding to assess onshore opportunities before being awarded the S4 contract in February.
The website added that the onshore exploration area covers approximately 7,400 square kilometers of the Sirte Basin, Libya’s most important oil-producing region.
Under the production-sharing agreement, Chevron will bear 100% of exploration costs in exchange for 25% of oil profits if commercially viable resources are developed.
These terms are more attractive than Libya’s previous licensing system, under which international companies assumed the full exploration risk but typically received a smaller share of production, sometimes as little as 12%. According to the website, this highlights the intensity of competition for capital faced by the National Oil Corporation.
