Halliburton and Honeywell International Inc. are hammering out $1.4 billion worth of deals to develop an oil field and refinery with National Oil Corporation in Libya, the Wall Street Journal reports, citing the chairman of state-owned firm, Farhat Bengdara.
Libya’s NOC and Honeywell are set to unveil a contract related to the construction of a refinery in southern Libya, Bengdara and a spokesman for the American firm told the Wall Street Journal. The initial deal, expected to be announced this weekend, is for the design of the plant, the spokesman said, which would be followed by a $400 million pact to build the entire plant.
This announcement notably comes after U.S. Secretary of State Antony Blinken told a senate committee on Wednesday that the U.S. was actively working to reopen an embassy in Libya, in part so it could better support the prospect of Libyan elections. The U.S. shut its embassy in Tripoli in 2014 following violent clashes between militias.
Geoff Porter, president of U.S.-based North Africa Risk Consulting Inc, told the Wall Street Journal that “there is recognition in the U.S. that Libya is a workable environment.”
American firms now see Libya as “an environment in which you can operate reasonably safely, where you can more predictably invest in ways that you could not have a few years ago,” said Porter, who advises U.S. oil companies in the region.
NOC exports most of its gas to Europe through a pipeline from Libya to Italy. Over the next three to five years, it aims to increase oil production to 2 million barrels a day, from around 1.2 million currently, and to produce 4 billion standard cubic feet of gas a day, up from roughly 2.6 billion.