Libya’s oil problems are far from over

Politics, geopolitics and conflicts

Libya’s exports remain blocked, and while there have been some reports of some oil coming out, it has mostly been for domestic use and some ships have been allowed to load from storage. The majority remains hijacked by a new drive to seize control by two rival governments (Benghazi and Tripoli). On Friday, the interior minister of the government in Tripoli (Imad Trabelsi) announced that there had been meetings in the last 48 hours with “security forces” (read: various militias). This could easily lead to an armed run against the Central Bank to forcefully oust Central Bank Governor Al-Kabir, who appears to be switching alliances from Prime Minister Tripoli Dbeibah to General Haftar in the east, but who has since been fled the country. Tripoli’s interior minister denied there were plans to take the Central Bank by force. They are now holding out for the outcome of UN talks with representatives of each rival government, but we don’t see a consensus being reached at this point. Last week, it was reported that Libya’s total oil production was cut in half, but at the time of writing, it is unclear how much Libya is currently producing or exporting. Markets are playing a guessing game and turning their attention to Chinese demand, OPEC cuts and various bank forecasts for oil prices this year and next. Early on Friday, Al-Kabir re-emerged after fleeing and claimed that the Tripoli government’s attempt to take the bank by force had failed…

Politics, geopolitics and conflicts

Libya’s exports remain blocked, and while there have been some reports of some oil coming out, it has mostly been for domestic use and some ships have been allowed to load from storage. The majority remains hijacked by a new drive to seize control by two rival governments (Benghazi and Tripoli). On Friday, the interior minister of the government in Tripoli (Imad Trabelsi) announced that there had been meetings in the last 48 hours with “security forces” (read: various militias). This could easily lead to an armed raid on the Central Bank to forcefully oust Central Bank Governor Al-Kabir, who appears to be switching alliances from Prime Minister Tripoli Dbeibah to General Haftar in the east, but who has since been fled the country. Tripoli’s interior minister denied there were plans to take the Central Bank by force. They are now holding out for the outcome of UN talks with representatives of each rival government, but we don’t see a consensus being reached at this point. Last week, it was reported that Libya’s total oil production was cut in half, but at the time of writing, it is unclear how much Libya is currently producing or exporting. Markets are playing a guessing game and turning their attention to Chinese demand, OPEC cuts and various bank forecasts for oil prices this year and next. Early on Friday, Al-Kabir re-emerged after fleeing and claimed that the Tripoli government’s attempt to take the bank by force had failed and that “we are assessing the situation right now – we may be back very soon”, based on in a phone interview with POLITICO. . This is a complicated game in which rival courts rule on control of the Central Bank, and Al-Kabir seems to feel as if he has the upper hand now; however, his return to the bench is not likely to be smooth, if it happens at this point.

On the Israel-Gaza front, peace talks are going nowhere, with Hamas killing six hostages and now demanding the release of several Palestinian prisoners as part of the deal. On the other hand, Israel is targeting the West Bank, escalating violence outside of Gaza, albeit on a smaller scale.

Discovery and development

CNOOC Limited has announced the start of production at the Wushi 17-2 Oilfield Development Project in Beibu Gulf. The project, which includes a new wellhead platform and an oil and gas processing terminal, will involve 43 development wells, including 28 production wells and 14 water injection wells. Peak production is expected to reach approximately 9,900 barrels of oil equivalent per day by 2026. CNOOC holds an 80% stake in the project and serves as operator.

Talos Energy announced a significant oil and gas discovery at the Ewing Bank 953 well in the US Gulf of Mexico, with an estimated recoverable resource of 15-25 million barrels of oil equivalent. Drilling activities at this well disclosed approximately 127 feet of net pay at approximately 19,000 TVD feet, with first production expected in mid-2026. Ewing Bank 953 will be tied back to the South Timbalier 311 Megalodon platform, part-owned by Talos.

Harbor Energy has begun appraisal drilling at the Kan prospect in the Gulf of Mexico, a field estimated to hold 200-300 Mboe. This follows Harbour’s recent $11.2 billion acquisition of Wintershall Dea, increasing its stake in Kan from 30% to 70% and making it the operator.

Deals, mergers and acquisitions

Brazilian company 3R Petroleum became Brava Energia following a merger with local player Enauta. The combined company is now one of the largest independent oil producers in Latin America, with both onshore and offshore assets. Brava Energia will begin trading on the Sao Paulo stock exchange under the symbol BRAV3 on September 9. The company has a diversified portfolio with robust, low-risk reserves and plans to start production soon at the Atlanta field in the Santos Basin.

Sinochem is considering selling its 40% stake in the Wolfcamp shale oil joint venture with ExxonMobil at a potential valuation of more than $2 billion. Discussions are in preliminary stages and no deal is confirmed. Sinochem, which has shifted its focus from oil and gas to new materials and life sciences, could also keep its stake or sell to other interested parties, including rival national oil corporations in Asia. If completed, this sale would end Sinochem’s involvement in the Permian.