Libya restarts oil production and exports… For now

Politics, geopolitics and conflicts

On Thursday, Libya’s eastern parallel government (the Haftar clan) lifted a major crackdown on production and exports just hours after a deal was struck for two compromise candidates to head the Central Bank, which controls the country’s oil revenues. Now it is about who can control these candidates and how can these candidates simply insert themselves into the corrupt circles that swarm around both governments, east and west. As mentioned earlier, both the Haftar (East) and Dbeibah (West) clans were benefiting enormously (in terms of personal pockets) from the existing stalemate that provided a false sense of fragile stability until the explosion at the Central Bank. Both sides would like to return to that profitable stalemate, at least until they can further bolster their coffers and recruit enough support to take either Tripoli or Benghazi. A new CBL boss buys the Libyans some more time, but they will not escape the inevitable. Oil is flowing again, and before the latest shutdown, the country was pumping 1.2 million bpd. Oil will now continue to flow, most likely until the next revenue wrangle or the next imbalance of control over the new CB leaders.

Discovery and development

Turkish Petroleum (TPAO) has discovered one billion barrels of oil in Turkey’s Sirnak province, marking the country’s largest onshore discovery. Located near Cizre, the Sehit Aybuke Yalcin-1 well is currently producing 10,000 bpd,…

Politics, geopolitics and conflicts

On Thursday, Libya’s eastern parallel government (the Haftar clan) lifted a major crackdown on production and exports just hours after a deal was struck for two compromise candidates to head the Central Bank, which controls the country’s oil revenues. Now it is about who can control these candidates and how can these candidates simply insert themselves into the corrupt circles that swarm around both governments, east and west. As mentioned earlier, both the Haftar (East) and Dbeibah (West) clans were benefiting enormously (in terms of personal pockets) from the existing stalemate that provided a false sense of fragile stability until the explosion at the Central Bank. Both sides would like to return to that profitable stalemate, at least until they can further bolster their coffers and recruit enough support to take either Tripoli or Benghazi. A new CBL boss buys the Libyans some more time, but they will not escape the inevitable. Oil is flowing again, and before the latest shutdown, the country was pumping 1.2 million bpd. Oil will now continue to flow, most likely until the next revenue wrangle or the next imbalance of control over the new CB leaders.

Discovery and development

Turkish Petroleum (TPAO) has discovered one billion barrels of oil in Turkey’s Sirnak province, marking the country’s largest onshore discovery. Located near Cizre, the Sehit Aybuke Yalcin-1 well is currently producing 10,000 bpd, with plans to increase output to 100,000 bpd. This discovery could more than double Turkey’s oil production, helping reduce its heavy reliance on energy imports from Russia, Azerbaijan and Iran. TPAO aims to further explore the region and complete a full development plan by the end of the year.

In other Turkish news, the country will begin oil and gas exploration off the coast of Somalia this month using the seismic survey vessel Oruc Reis. This follows an agreement in March that granted Turkish oil licenses for three areas in Somali waters. The ship will explore a 5,000 km2 region with oil potential and will be accompanied by naval frigates. The seismic survey is expected to take about seven months.

Despite persistent pressure from China, Malaysia is expanding its oil and gas exploration in the South China Sea, with state-owned Petronas drilling new wells despite Chinese coast guard activity near its operations. China has claimed sovereignty over the disputed waters, but Malaysia insists its activities are in its own exclusive economic zone. In 2023, Malaysia discovered more than 1 billion boe in offshore resources, marking a significant year for exploration. Prime Minister Anwar Ibrahim emphasized that these operations are essential to Malaysia’s economic survival.

Aker BP has confirmed gas discoveries in appraisal well 6507/2-7 S in the Norwegian Sea, approximately 230 km west of Sandnessjøen. The well, located near the Skarv field, was drilled to assess the size of the 2022 discoveries, with estimates of recoverable oil equivalent between 13-55 million barrels in the primary target and 8-12 million barrels in the secondary target. Aker BP, together with partner Wintershall Dea, is considering connecting these discoveries to existing infrastructure. A production test produced 300,000 Sm3 of gas per day.

TotalEnergies has approved a $10.5 billion oil project in Block 58 off the coast of Suriname, marking a historic moment for the country’s economy. The GranMorgu development will take advantage of oil discoveries in Sapakara South and Krabdagu, with production expected to begin in 2028. The project, named after the Goliath Grouper fish, symbolizes the scale of the development, with recoverable oil reserves estimated at 750 million barrels. Using advanced technology to reduce greenhouse gas emissions, the project will include an all-electric FPSO unit and associated gas reinjection, ensuring low-cost, low-emission operations.

Ecopetrol and Petrobras have announced major gas discoveries in Colombia that could strengthen the country’s energy self-sufficiency. The jointly developed Sirius project, operated by Petrobras, is projected to begin offshore gas production between 2029 and 2030. With estimated reserves exceeding 6 tcf, the project could double Colombia’s gas reserves and produce 470 million cubic meters per day for a decade. In addition, Ecopetrol discovered the Papayuela well, which could provide 800 million cubic meters of gas per day, potentially meeting 80% of Colombia’s national demand once developed.

Deals, mergers and acquisitions

Axis Energy Services and Brigade Energy Services have merged to form the largest well services company in the US, retaining the name Axis Energy Services LLC and headquartered in Dallas. The combined company now has more than 1,700 employees and operates more than 200 work platforms, marking the largest fleet in the industry. With operations in key oil fields such as the Permian and Eagle Ford, Axis is positioned to enhance completion services, workover solutions and block and abandon operations.

Chevron-Hess merger clears FTC antitrust review, moves closer to finalizing $53 billion deal. As part of the settlement, Hess CEO John Hess will not join Chevron’s board because of FTC concerns about his communications with OPEC officials. Instead, he will serve as an advisor to Chevron on government relations and social investment in Guyana. Chevron CEO Mike Wirth expressed regret that Hess will not contribute his experience to the board, but looks forward to leveraging his expertise in an advisory role. Completion of the merger is still subject to resolution of the ongoing arbitration with ExxonMobil.

Delek is reducing its majority stake in Ithaca Energy as part of the company’s merger with Eni UK to ensure that at least 10% of the shares remain publicly available. Currently owning 88.55 percent of Ithaca, Delek subsidiary DKL Energy plans to sell more than 59 million shares at 102 pence each, raising about 60 million pounds ($80 million). This reduction is necessary in order for Ithaca to meet regulatory requirements regarding the distribution of shares. Following this transaction, Delek will retain a 52.7% ownership in the merged entity, while Eni UK will hold 37.3%.