TotalEnergies, ConocoPhillips Buy Waha Stake From Hess

French major plans to spend $2 billion on the Libyan field to raise production to 100,000 B/D, and add solar power to the national grid.

TotalEnergies has pledged $2 billion to raise crude oil output at the North Gialo project .
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The Libyan government has approved the sale of Hess’ 8.16% stake in the giant Waha field to TotalEnergies and ConocoPhillips. Each company will add equal 4.08% stakes to their current 16.33% holdings in the project. Patrick Pouyanné, chief executive of TotalEnergies, confirmed the deal while speaking at the Libya Energy & Economic Summit this week. Financial terms of the transaction were not disclosed.

A leaked letter dated 9 November 2021 showed that interim Prime Minister Hamid Dbeibeh welcomed and supported the proposed joint acquisition.

“Your willingness to strengthen the partnership with the shareholders in the Waha fields is well noted in order to meet the challenges facing the development,” the Prime Minister said in the letter.

The letter also asked the two companies to contribute $45 million to a wholly owned government entity that will be designated in the course of the finalization of the transaction agreement. The funds will be allocated for infrastructure projects “in relations to youths and sports”, the letter added.

Pouyanné said that around $2 billion will be invested in the North Gialo project to raise output by 100,000 B/D. The French operator will also support a rebuild at the Mabrouk oil field, which was damaged in 2014, and signed a deal to add as much as 500 MW of solar electricity generation capacity to the Libyan national grid.

“Some may see more boldness than wisdom in TotalEnergies’ decision to partner with Libya. I don’t,” said Pouyanné. “Where they see risks, I see the opportunities.”

Libya has been in a long period of in-fighting since 2011, when Moammar Qaddafi was toppled in an uprising. A truce struck between factions last year lead to more stability and enabled oil output to rise to around 1.1 million B/D. The country needs greater foreign investment in order to maintain, and grow, that level of production.

The country has presidential elections scheduled for 24 December. Dbeibah confirmed he will run for the post, joining a field that includes Saif al-Islam Qaddafi, a son of the former dictator, and Khalifa Haftar, commander of the Libyan National Army.

TotalEnergies received its initial 16.33% working interest in six Waha concessions through the $450 million purchase of Marathon Oil Libya in 2018. At the end of 2019, the Waha concessions were producing about 350,000 BOED.