Home Money & Commodities Shell eyes return to Libya with oil, gas, solar investments

Shell eyes return to Libya with oil, gas, solar investments

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LONDON: Royal Dutch Shell (RDSa.L) is considering a return to Libya with a plan to develop new oil and gas fields and infrastructure, as well as a solar project, two sources said, a decade after exiting the North African country because of unrest.
The plan, details of which were seen by Reuters, marks a rare new oil and gas foray by the energy major as it seeks to cut fossil fuel investment and slash greenhouse gas emissions.
In that strategy, Shell still needs some new projects to maintain output as reserves in existing oil and gas fields have rapidly fallen after years of slowing drilling activity.
Under the Libya plan, discussed with state-run National Oil Corporation (NOC), Shell would explore for new oil and gas fields in several blocks in the onshore Sirte and Ghadames basins, as well as the offshore Cyrenaica basin.
Shell also proposed re-developing ageing fields such as block NC-174 in the Murzuq basin and developing new fields including in the Ain Jarbi block.
The plan includes developing a solar energy project south of the Sirte Basin, part of Shell’s strategy to cut oil output by up to 2% a year by 2030 and hike investment in renewables and low carbon technologies to make up 25% of its budget by 2025.
“Shell is preparing to return as a major player,” Shell’s proposal said, according to the sources and details seen by Reuters. The proposal did not give details about the value of any investment or scale of the oil, gas and solar projects.
A Shell spokesperson declined to comment. NOC did not immediately respond to a request for comment.
Other firms now working in Libya, include TotalEnergies (TTEF.PA), Italy’s Eni (ENI.MI) and ConocoPhillips (COP.N).
Shell’s $9.5 billion sale of its U.S. onshore Permian basin operations in September freed up about $1 billion for other upstream activities, a senior company source told Reuters.
Libya’s vast oil and gas resources, huge potential for solar power and proximity to Europe make it attractive, although a decade of conflict and chaos has deterred most investors.
But a unity government has now taken office ahead of a December election, bringing some measure of stability although NOC and the energy industry have remained at the centre of political tussles in the past year between rival factions.