Oman and Libya widen energy investment drive

Oman and Libya have moved to deepen economic cooperation after Prime Minister Abdul Hamid Dbeibeh held talks in Tripoli with a delegation representing Omani investment and energy companies, with both sides placing oil, gas, renewable energy and joint investment projects at the centre of a broader partnership agenda.

The discussions were followed by a memorandum of understanding between OQ Exploration and Production and the Libyan Investment Authority, creating a framework to examine investment opportunities in exploration and production in Libya, Oman and third markets. The agreement was signed by Ashraf bin Hamad Al Maamari, chairman of OQ Exploration and Production, and Ali Mahmoud Hassan, chairman and chief executive of the Libyan Investment Authority, in the presence of Dbeibeh.

The talks underline a shift in Oman–Libya relations from general commercial engagement towards sector-specific cooperation in energy and investment. The two sides are seeking projects that can support knowledge transfer, technical collaboration, value-added industries and economic diversification, while giving Omani companies a potential route into one of North Africa’s most resource-rich but operationally complex energy markets.

For Libya, the engagement with Omani companies comes as the Government of National Unity seeks to restore confidence in the country’s oil and gas sector after years of disruption caused by political fragmentation, revenue disputes and security challenges. Libya remains one of Africa’s major oil producers, but its output has often been vulnerable to shutdowns and force majeure declarations linked to domestic power struggles.

Tripoli has stepped up efforts this year to bring international capital back into the sector. A 25-year oil development agreement involving TotalEnergies and ConocoPhillips was signed in January through Waha Oil Company, with investment of more than $20 billion aimed at lifting production capacity by up to 850,000 barrels per day. The National Oil Corporation has also awarded oil and gas exploration blocks to companies including Chevron, Eni, QatarEnergy and Repsol in its first licensing round since 2007.

Those developments provide the backdrop for Omani interest. OQ’s agreement with the Libyan Investment Authority fits into a wider strategy of expanding reserves, building production exposure outside Oman and generating returns from international assets. The company’s upstream arm has been seeking partnerships that can balance commercial growth with Oman’s long-term diversification objectives.

Oman is also pursuing a wider investment agenda beyond hydrocarbons, using energy partnerships to create openings in renewables, logistics, infrastructure and industrial services. Its engagement with Libya follows earlier ministerial-level talks on trade, industry and renewable energy, where both sides reviewed export opportunities for Omani products and possible joint industrial investments.

Bilateral trade remains modest but has room to expand. Trade between Oman and Libya stood at about OMR 19.5 million in 2025, with Omani exports accounting for almost the entire volume. Libyan investment in Oman has a larger footprint, with total invested capital reaching about OMR 872.3 million across 368 companies involving 608 Libyan shareholders by 2025. Libyan contributions accounted for about OMR 335.49 million, representing nearly 78.8 per cent of the total invested capital in those ventures.

The current talks point to a more reciprocal phase, where Libya is looking to attract capital and technical expertise while Oman seeks upstream opportunities and long-term investment channels. Renewable energy was also part of the discussions, reflecting both countries’ interest in diversifying beyond conventional oil and gas. Libya has strong solar potential, while Oman has been positioning itself in clean energy, hydrogen and low-carbon industrial development.

The challenge for investors remains Libya’s operating environment. The country continues to be divided between rival authorities, and control over oil revenues remains politically sensitive. International companies have returned selectively, but large-scale commitments are still tied to security, contract stability, payment mechanisms and the ability of state institutions to protect projects from political disruption.

Oman’s approach appears cautious but strategic. Rather than announcing immediate field development commitments, the new framework gives OQ and the Libyan Investment Authority space to assess commercially viable projects, evaluate risks and identify areas where both sides can combine capital, technical skills and institutional support.