Libyan Oil Production Hits an 11-Year High

Politics, Geopolitics & Conflict

Libyan oil production has hit an 11-year high at 1.422 million bpd, recovering (at least for now) from the Central Bank control battle that saw oil once again taken hostage, with production cut in half earlier this year. At the same time, Libya’s NOC has announced it will put up for exploration 22 new onshore and offshore areas in a public tender, though no exact date for presenting the blocs to international oil companies has yet been announced. The seemingly smooth sailing for Libyan oil production right now signifies that the rival Haftar and Dbeibah clans (Benghazi versus Tripoli) have found a mutually beneficial deal that keeps money (licit and illicit) flowing to both clans.

Elections this week in Romania are heading into a second round after the far-right candidate, a pro-Russian figure, unexpectedly earned the most votes, sparking cries of foul play and Russian interference, which the Kremlin has of course denied. This would be a fairly significant blow to the EU, to lose Romania to the Hungary-Slovakia camp, further fracturing the block and weakening it in the face of Moscow.

Discovery & Development

DNO and its partners have discovered oil at the “Othello” prospect in the southern North Sea through wildcat well 2/6-7 S in production license 1086. Preliminary estimates suggest the find contains 25-57 mboe. The discovery includes oil columns in the Borr Member, with moderate to good reservoir quality, though the primary target in the Ula Formation was unsuccessful. The licensees plan to evaluate this discovery alongside nearby prospects for potential future development.

Galp has confirmed a significant light oil and gas-condensate discovery at its Mopane-1A appraisal well in block PEL83 offshore Namibia. The well revealed high-quality reservoir sands with favorable characteristics such as good porosity, high permeability, and minimal impurities. This discovery bolsters Namibia's reputation as an emerging oil hotspot, with Galp, Shell, and TotalEnergies announcing major finds in recent years, including a potential 10-billion-barrel estimate for the Mopane field. Galp plans to proceed with further exploration, including appraisal wells and a 3D seismic campaign, to fully assess the area's potential.

Petrobras and Ecopetrol have announced the largest gas discovery in Colombia’s history with the drilling of the Sirius-2 well. The confirmed volumes exceed 6 tcf, potentially increasing the country’s current gas reserves by 200%. This discovery, detailed in Petrobras' securities filing, marks a significant milestone for Colombia’s energy sector. The find is expected to strengthen Colombia’s energy security.

CNOOC has started production at its Huizhou 26-6 oilfield project in the Pearl River Mouth Basin in the South China Sea, featuring China's first intelligent offshore drilling production platform. The project includes 19 development wells and is expected to peak at 20,600 boepd by 2027. The development focuses on light crude oil and natural gas, utilizing advanced facilities such as the modified FPSO Nan Hai Fen Jin. This marks another milestone for CNOOC, following a series of significant offshore oil and gas production starts in recent months.

The Erawin oilfield in southwest Libya has begun producing its first oil, marking a significant advancement in the country's energy sector. Petrofac, awarded a $100 million contract in 2021, oversaw the development, which includes constructing well pads, flowlines, and a 100-km pipeline to transport oil to El Sharara. 

Pakistan’s Oil and Gas Development Company Limited (OGDCL) has announced a major gas discovery in the Uch Sharif area of Dera Bugti, Balochistan, uncovering reserves through drilling at a depth of 1,345 meters. The project is expected to produce 5 million standard cubic feet of gas daily, addressing regional energy shortages and boosting Pakistan's energy potential. OGDCL plans to supply the gas to Uch Power Limited via its processing plant, a significant step toward energy self-sufficiency. 

Deals, Mergers & Acquisitions

Russia and Pakistan are exploring cooperation in offshore oil and gas exploration, refining, and enhancing recovery from mature fields, as discussed during intergovernmental meetings in Moscow. Russia's Deputy Energy Minister, Roman Marshavin, highlighted ongoing stable oil deliveries to Pakistan and plans to expand these along with other commodities like grains and fertilizers. Pakistan's Petroleum Minister, Musadik Malik, confirmed resumed talks on crude supply but denied reports of a finalized monthly oil import deal for 2025. 

Shell and Equinor have announced plans to merge their UK North Sea oil and gas assets, forming the region's largest independent producer with a projected output of over 140,000 boepd in 2025. The joint venture, headquartered in Aberdeen, will integrate 12 oilfields, including Equinor's massive Rosebank field, which holds nearly 500 million barrels of untapped reserves. Shell emphasized that the merger will address the declining productivity of the basin. The deal, subject to regulatory approval, is expected to close by the end of 2025.

Woodside Energy Group has partnered with Bechtel for the engineering, procurement, and construction (EPC) of its Louisiana LNG project, with a final investment decision expected by Q1 2025. The project includes foundation development for three production trains with a combined capacity of 16.5 mtpa, expandable to a permitted capacity of 27.6 mtpa. Woodside plans to spend up to $1.3 billion on the project through Q1 2025, keeping costs aligned with earlier estimates of $900-$960 per ton of LNG. After fully acquiring the project in October for $1.2 billion, Woodside is seeking to sell a 50% stake to a new partner.

Crescent Energy (CRGY) has agreed to acquire Eagle Ford oil-producing assets from Ridgemar Energy for $905 million, comprising cash, stock, and contingent oil price considerations. The acquisition adds ~20,000 boepd of oil-weighted production and 140 high-return drilling locations. To fund the deal, Crescent has launched an underwritten public offering of 18 million shares, with an option for underwriters to purchase an additional 2.7 million shares. This move aligns with Crescent's strategy to consolidate assets in the Eagle Ford region, where it has invested over $4 billion in acquisitions over the past 18 months.