Royal Dutch Shell is considering returning to Libya with a plan to develop new oil and gas fields and infrastructure, as well as a solar project, a decade after leaving the North African country due to unrest there.
The plan marks a rare new turn to oil and gas by the energy company, which seeks to reduce investment in fossil fuels and reduce greenhouse gas emissions. In this strategy, Shell still needs some new projects to support production, as reserves in existing oil and gas fields have declined rapidly after years of delayed drilling, Reuters reports.
Under the plan for Libya, discussed with the state National Petroleum Corporation (NOC), Shell will explore new oil and gas fields in several blocks in the Sirte and Ghadames coastal basins, as well as in the Cyrenaica sea basin. Shell also proposed redeveloping aging fields such as the NC-174 block in the Murzuk Basin and developing new deposits, including the Ain Jarby block.
The plan includes the development of a solar project south of Sirte, part of Shell’s strategy to reduce oil production by up to 2% a year by 2030 and increase investment in renewable energy and low-carbon technologies to 25%. from its budget until 2025.
“Shell is preparing to return as a key player,” the Shell proposal said, according to sources and details seen by Reuters. The proposal does not provide details on the value of the investment or the scale of the oil, gas, and solar projects.
Other companies currently operating in Libya include TotalEnergies, Italy’s Eni, and ConocoPhillips. Shell’s $ 9.5 billion sales of its Perm Basin operations in the United States in September released about $ 1 billion in other upstream activities, a company source told Reuters.
Approval within months
Libya’s vast oil and gas resources, huge potential for solar energy, and proximity to Europe make it attractive, although a decade of conflict and chaos is holding back most investors. But the unity government has already taken office ahead of the December elections, bringing some stability, although the NOC and the energy industry have remained at the center of political struggles over the past year between rival factions.
Shell left Libya in 2012 amid upheavals following the ouster of longtime dictator Muammar Gaddafi in 2011. Reuters sources said a Shell board could approve the return plan in months. In August, the NOC said it had held talks with Shell about possible oil and gas developments and renewable energy projects, without giving details.
Shell’s plans include helping Libya capture gas that is extracted along with oil but is now being released into the air or burned. The company also aims to develop oil storage terminals in the Mediterranean ports of Es Sidr and Ras Lanuf.
The company is expected to distribute Libyan cargoes of crude oil and refined oil products from Libya for sale on the international market. Shell said it aims to focus oil and gas production in nine “main” basins as part of its energy transition, which they say could change over time.