Chevron Returns to Libya Amid Growing Appetite for Oil Resources

Libya's oil production is set to increase as US major Chevron returns to the country after a six-year absence. The company has signed an exploration and production-sharing agreement with Libya's National Oil Corporation (NOC) covering Block S4 in the Sirte Basin.

The agreement comes as conflict across the Gulf heightens the strategic importance of expertise from outside the region, according to industry analysts. Under the terms, Chevron will bear 100 percent of the exploration costs and receive 25 percent of oil profits if commercially viable resources are developed.

Libya is targeting an increase in crude production from 1.5 million barrels per day (bpd) to 2 million bpd, requiring significant investment in existing fields and new resources. The country's NOC has been actively seeking international partnerships to boost output, which has been hindered by security challenges since the overthrow of Muammar Gaddafi in 2011.

Chevron first entered Libya in 2004 but relinquished its exploration licenses in 2010 following unsuccessful drilling. Its return began last year with talks between the US company and NOC over potential exploration and production opportunities.