Seventeen Years of No Licensing & One Very Large Bill

A halt in oil licensing doesn’t show up as a single missing number on a balance sheet. It compounds quietly for nearly two decades. Then it arrives all at once, as a rehabilitation bill nobody budgeted for.

A Few Percent a Year, Compounding

Oil fields lose output every year whether or not anyone drills a new well. The International Energy Agency puts the global average post-peak decline rate at 5.6% annually for conventional oil, and even the largest, lowest-decline reservoirs in the world, the supergiant fields concentrated in the Middle East, lose close to 2% to 3% of output a year without continued investment. Libya’s Sirte and Murzuq basins fall into that same low-decline category by geology, which is precisely why the country can still produce 1.4 million barrels a day off infrastructure that has had almost no new exploration investment in nearly two decades. It also means the production base has been eroding the entire time, even during years when headline output looked stable.

A licensing freeze doesn’t just pause future growth. It removes the mechanism that normally offsets that erosion. New blocks bring new production to replace what older fields are losing. Without them, a country is running its reserve base down at the natural decline rate with nothing behind it.

1.7 Million Versus 1.4 Million

Libya last held a competitive licensing round in 2007. The next one didn’t open until February 2026, a gap of nearly 17 years that spans the 2011 civil war, the subsequent east-west split, and years of competing claims over who had the authority to grant exploration rights at all. Libya’s pre-2011 production peak ran close to 1.7 million barrels a day. Current output sits at roughly 1.4 million, the highest level in more than a decade but still well below where the country was operating before the freeze began.

That gap matters more than it looks, because Libya isn’t short on geology. The country holds Africa’s largest proven oil reserves at roughly 48 billion barrels. The constraint was never what’s underground. It was the absence of any functioning process to license new exploration acreage, rehabilitate aging infrastructure, or bring in the capital that a 17-year-old field base needs just to stay where it is, let alone grow.

Five Blocks Out of Twenty-Two

When Libya finally reopened licensing, the scale of the deferred investment became visible in the response. Only 5 of the 22 blocks on offer were ultimately awarded, two offshore and three onshore, a steep falloff from the 44 companies that had initially applied and the 37 that were pre-qualified to bid. Part of that gap reflects lingering political risk. Part of it reflects something more structural: many of the blocks on offer contained mature discoveries needing redevelopment rather than fresh exploration, a profile that typically attracts smaller independent operators rather than the major-only eligibility criteria NOC had set.

Rehabilitating what 17 years of deferred investment left behind now carries its own price tag. Industry estimates for bringing Libya’s upstream facilities, pipeline network, and export terminals back to capacity run to $25 billion to $30 billion over five years under an accelerated development scenario targeting 2.35 million barrels a day by 2030. A single $20 billion, 25-year development agreement between TotalEnergies and ConocoPhillips, aimed at adding 850,000 barrels a day from the Waha concessions alone, gives some sense of scale: that is roughly the cost of catching up on infrastructure that an uninterrupted licensing cadence would have kept current the entire time.

The Cost That Doesn’t Show Up in Barrels

The visible cost of Libya’s licensing freeze is the headline figure: 17 years, a missed production peak, a $20 to $30 billion catch-up bill. The less visible cost is the credibility gap a freeze that long leaves behind. International capital evaluates a country’s geology and the reliability of the institution running the licensing process as two separate questions, and a 17-year gap leaves the second one unanswered no matter how good the first one is. Libya’s National Oil Corporation spent the years before 2026 closing that second question, rebuilding the institutional credibility a licensing round depends on well before it reopened bidding at all. Libya’s February 2026 round, underwhelming as the bid count was, is the first test of whether 17 years of accumulated doubt can be unwound faster than it took to build up.

Author Profile

Adam Regan: Deputy Editor

Features and account management. 7 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com