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TotalEnergies Secures Long-Term Extension of Waha Concessions in Libya

French oil and gas giant TotalEnergies has successfully obtained an extension for its operations in the Waha Concessions located in the Sirte Basin, Libya, now extended until the end of 2050. This strategic move enhances TotalEnergies’ long-term positioning in one of the region’s crucial energy sectors.

Agreement Details

This significant extension follows a formal agreement inked by Patrick Pouyanné, the chairman and CEO of TotalEnergies, during the Libya Energy & Economy Summit held in Tripoli on January 24. The signing event was made even more notable by the presence of Libya’s Prime Minister, Abdul Hamid Dbeiba, highlighting the importance of this collaboration for both parties.

Revised Fiscal Terms to Boost Production

The newly established agreement introduces revised fiscal terms designed to significantly boost production capabilities from the Waha Concessions. Currently, these concessions yield around 370,000 barrels of oil equivalent per day (boepd). The anticipated changes are expected to stimulate production and enhance the operational efficiency of the sector.

Expansion Plans: North Gialo Field

A major development noted in this agreement is the anticipated North Gialo field project. After its planned development, this field is projected to contribute an additional 100,000 boepd, further cementing TotalEnergies’ commitment to enhancing production from the Waha Concessions. This development reflects the company’s strategy of leveraging existing assets to maximize output.

Partnership Structure and Management

The Waha Concessions are a collaborative effort, jointly held by Libya’s state-owned National Oil Corporation (NOC) (59.16%), TotalEnergies (20.42%), and ConocoPhillips (20.42%). Operations in this concession are managed by the Waha Oil Company, which is owned by NOC, thereby ensuring that the benefits of these operations redound to Libyan interests.

Expressions of Gratitude

In a statement, Pouyanné expressed his gratitude, saying, "As we celebrate 70 years of presence in Libya, we are pleased to sign this agreement, and I would like to thank the Libyan authorities for their continued support, particularly Dr. Khalifa Rajab Abdulsadek, the Minister of Oil and Gas of Libya, and Masoud Suleman, Chairman of the National Oil Corporation (NOC)."

Commitment to Increased Production

Pouyanné further stated, “Present in the country since 1956, TotalEnergies reaffirms its long-standing commitment to working alongside its partners to increase Waha’s production, starting with the development of the North Gialo field. Extending the Waha concession aligns well with our strategy, given its low-cost, low-emission resources that offer significant opportunities for production growth.”

Environmental Improvements in Operations

Earlier this month, significant strides were achieved by the Waha Oil Company, which succeeded in reducing gas flaring at the North Defa field by 20 million cubic feet per day. This was accomplished through diligent maintenance and commissioning efforts focused on improving the gas compressor systems, showcasing a commitment to environmentally responsible practices.

Strategic Expansion Moves

In November 2022, TotalEnergies and ConocoPhillips jointly acquired an 8.16% stake in the Waha Concessions from Hess, increasing TotalEnergies’ holding from 16.33% to 20.41%. This transaction aligns with TotalEnergies’ ongoing efforts to collaborate with NOC in boosting oil production and mitigating gas flaring, thus enhancing the supply of electricity to power plants across Libya.

Agreements on Development Initiatives

In late 2019, TotalEnergies signed a significant agreement with NOC focused on supporting the development of the Waha Concessions through both technological expertise and social responsibility programs. The agreement detailed commitments of $70 million upfront from TotalEnergies, with two additional contributions of $30 million expected when the North Gialo and NC 98 projects become operational.

Local Economic Development Initiatives

In addition to the commitments outlined in previous agreements, TotalEnergies also pledged to invest $20 million over four years into local economic development initiatives, further emphasizing their commitment to the region’s economic growth beyond just oil production.

Initial Stake and Production Across Fields

TotalEnergies initially acquired a 16.33% interest in the Waha Concessions from Marathon Oil Libya in March 2018. This acquisition provided TotalEnergies access to reserves exceeding 500 million barrels and substantial exploration potential across a vast area of 53,000 km², underscoring the strategic value of this concession.

Production Portfolio in Libya

Since its establishment in Libya in 1956, TotalEnergies has maintained an operational footprint that enables it to produce around 113,000 boepd from various fields, including offshore sites like Al Jurf, and significant onshore operations at El Sharara, Mabruk, and the Waha Concessions.

Leveraging AI for legal Clarity

In navigating complex agreements such as the Waha Concessions’ extension, the AI legalese decoder can serve as an invaluable resource. By simplifying legal jargon and breaking down complex contractual terms, it helps organizations understand their obligations and rights more clearly. For TotalEnergies and similar companies, leveraging the AI legalese decoder can ensure that all parties are fully informed and aligned on the legal details involved in their agreements, which is crucial for strategic planning and operational execution.

Conclusion

In summary, TotalEnergies’ extension of the Waha Concessions exemplifies a commitment to sustainable growth and collaboration within Libya’s oil sector. With revisions in fiscal terms, planned development projects, and a focus on local economic initiatives, TotalEnergies is poised to enhance its operational footprint in the region, benefiting both the company and its local partners.

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