Libya announces first international licensing round in 15 years - EPSA V

The event, featuring Chairman of the National Oil Corporation (“NOC”), Mr. Masoud Suliman, the Minister of Oil and Gas, Mr. Khalifa Abdulsadek, and Mr. Abdulhameed Dbeiba, Prime Minister of Libya, was broadcast live on Libyan television, and was attended by various dignitaries and representatives of international energy companies.

The NOC Bid Round Team, composed of Abdulnaser Ben Zitoun, Beleid Salem and Basher Mohamed Mousbah, presented the strategic vision for Libya’s energy sector including goals to increase crude oil production to 2mbd by 2028, with more than 20 additional petroleum onshore and offshore blocks. These blocks were selected based on their viability and vicinity to existing surface facilities. The NOC is also conducting geological and geophysical studies across all petroleum basins in Libya, the outcome of these will be used to guide future exploration bidding rounds.

At the event, the NOC Bid Round Team presented improvements incorporated in the new bidding process, including the launch of a dedicated website which will provide a platform for processing the bid form pre-qualification conditions through to the selection of the successful bidders. Data will be virtually exchanged in a protected, confidential environment.

Updates to EPSA Contract and Fiscal Terms

The structure of the updated Exploration and Production Sharing Agreement (“EPSA”) takes into consideration current market conditions and offers International Oil Companies (“IOCs”) competitive commercial terms. On the fiscal terms, Mr. Beleid explained that an updated formula will be applied to improve the return on investment for IOCs. This formula will be based on the “A Factor” only. For context, the “A Factor” in the 2005 EPSA IV Model Contract is based on agreed ratios assigned from the IOC’s share of “excess petroleum” that is generated when the cumulative production value received equals the cumulative operation expenses incurred. Under these new fiscal terms, it appears that the NOC will no longer apply the “B Factor”, which is another ratio assigned previously to the IOC’s “excess petroleum” based on daily production levels. Other updated fiscal terms include:

A fixed rate for cost recovery that will shorten the payback period for IOCs

A sliding scale to be applied based on profitability structure (“R Factor”)

All costs to be fully born by the IOCs – however the NOC is granting broader and stable cost recovery and production sharing for IOCs

Timeline for the new Libyan Bid Round

The NOC Bid Round Team presented the following timetable:

• The new Libyan Bid Round process announced on 03/03/2025
• Roadshows to Tripoli w/c 03/03/2025 and Houston w/c 10/04/2025
• Qualification Process from 04/03/2025 to 21/04/2025
• Virtual Data Room open from 19/05/2025 to 17/07/2025
• Clarifications Process from 20/05/2025 to 14/08/2025
• Opening of Bids and Announcement of Successful Bidders w/c 15/11/2025
• EPSA Signing from 22/11/2025 to 30/11/2025

Why should IOCs be interested in the new EPSA bidding round?

Libya has the largest oil reserves in Africa and the ninth largest globally while 65% of Libya’s territorial waters and 70% of its land area remain unexplored

The Exploration Strategy for the next 25 years aims to add 8 billion barrels of oil to Libya’s 50 billion reserves

Whilst a member of the Organization of the Petroleum Exporting Countries (“OPEC”), Libya is not subject to the production cuts of the OPEC+ Agreement, providing for flexibility in terms of production levels

Libyan regulations in regard to EPSAs have been tried and tested and the processes involved are well known and well tested

Libya enjoys a strategic location to Europe with access to the continent’s international shipping routes

The NOC is politically independent and is aligned to evolving EU and OECD corporate finance reporting standards with investment protection in place to mitigate against potential risks

The new bidding round will promote favourable terms for IOCs with incentives around investment costs and other regulatory requirements

A favourable investment climate for IOCs

More than 30 companies have already expressed interest in Libya’s upcoming bid round. Over the past 18 months, key players such as ENI, BP, OMV and Repsol have lifted force majeure and resumed upstream activities in the Libyan market, signalling renewed confidence in the country’s energy sector. Libya is creating a more favourable investment climate to attract international energy companies with the launch of the new bidding round a cornerstone of this strategy, unlocking further opportunities for new projects and partnerships.

Why partner with us on your EPSAs in Libya?

We provide commercial legal and strategic advice across international energy and infrastructure projects. Combining proven experience, top-tier ability and relentless drive, we are Libyan market specialists – navigating the complex legal landscape to connect markets that intersect in and around Libya.

Our lawyers are energy experts who are regularly sought to advise major international energy companies on contentious and non-contentious matters regarding investment, growth and divestment from upstream interests, as well as the development and financing of midstream and downstream projects. Our lawyers have acted on some of the most high profile matters in Libya in past 25 years, and regularly advise on energy sector matters in Europe and the Middle East.

Formerly General Counsel of the Libyan National Oil Corporation and of the European Oilinvest Group, Ahmed Gaddah is an established and highly respected international energy lawyer and has worked across Libya, the Middle East and Europe. His understanding of energy economics saw him develop Libya’s EPSA IV model contract and bidding rounds that attracted billions of dollars of inward investment from major international upstream players. This experience gives him unique insight into the new EPSA Model Contract and bidding round.

With over 20 years’ experience in the Libyan market and beyond, and formerly a partner at the London offices of Hogan Lovells International LLP and general counsel at the Libyan branch of AECOM Inc., Tarek Eltumi has substantial experience advising international upstream energy companies, commercial banks, multilateral lending agencies, contractors, project sponsors and developers. He has advised various international energy players on EPSA contracts and Libya Petroleum law issues, including M&A, regulatory issues and taxation issues. In addition, Tarek is regularly instructed as expert witness and counsel on major international arbitral and court disputes.

To discuss Libya’s new EPSA bid round or to learn more about us, please contact us on enquiries@eltumipartners.com.