Royal Dutch Shell is considering a return to Libya with a plan to develop new oil and gas fields and infrastructure, as well as a solar project, two sources said, a decade after leaving the North African country due to unrest.
The plan, details of which were seen by Reuters, marks a rare new foray into oil and gas by the energy major as it seeks to reduce investments in fossil fuels and greenhouse gas emissions.
As part of this strategy, Shell still needs new projects to maintain production, as reserves in existing oil and gas fields have fallen rapidly after years of slower drilling activity.
Under the Libyan plan, discussed with the state-run National Oil Corporation (NOC), Shell is reportedly exploring for new oil and gas fields in several blocks in the onshore Sirte and Ghadames basins, as well as in the offshore Cyrenaica basin.
Shell has also proposed to redevelop aging fields such as Block NC-174 in the Murzuq Basin and to develop new fields notably in the Ain Jarbi block.
The plan includes the development of a solar power project in the southern Sirte Basin, as part of Shell's strategy to reduce oil production by up to 2% per year by 2030 and increase investment in renewable energy and low-carbon technologies to 25% of its budget by 2025. .
"Shell is preparing to return as a major player," said the Shell proposal, according to sources and details seen by Reuters. The proposal did not give details on the value of any investment or the scale of the oil, gas and solar projects.
A Shell spokesman declined to comment. The NOC did not immediately respond to a request for comment.
Other companies currently working in Libya include TotalEnergies, Italy's Eni and ConocoPhillips.
Shell's $9.5 billion sale of its onshore Permian Basin operations in September freed up about $1 billion for other upstream activities, a company source told Reuters.
APPROVAL WITHIN MONTHS
Libya's vast oil and gas resources, huge solar energy potential, and proximity to Europe make it attractive, although a decade of conflict and chaos has deterred most investors.
But a unity government has now taken office ahead of the December elections, bringing some stability, although the NOC and the energy industry have remained at the center of political struggles over the past year between rival factions.
Shell left Libya in 2012, amid the unrest that erupted after the overthrow of longtime autocrat Muammar Gaddafi in 2011.
The sources said Shell's board of directors could approve the return plan within months.
The NOC said in August that it had held discussions with Shell on possible oil and gas developments and renewable energy projects, without giving details.
Shell's plans include helping Libya capture gas extracted with oil but now vented or flared. It also aims to develop oil storage terminals at the Mediterranean ports of Es Sidr and Ras Lanuf.
The final terms of any agreement were not immediately clear.
But according to the Shell proposals seen by Reuters, the company would be allocated cargoes of Libyan crude and refined oil products from Libya for sale on the international market.
Shell said it aims to concentrate oil and gas production in nine "core" basins as part of its energy transition, which it said could change over time.