The escalating chaos in Libya since the 2011 uprising that dislodged North African strongman Muammar Gaddafi has had severe repercussions for the region’s projects market.

Dozens of large energy and infrastructure schemes were either put on hold or cancelled as international companies grew wary of the country’s militia violence and its increasingly dysfunctional institutions become less able to ensure the conditions needed for successful project execution.

Between 8 April 2014 and the same date this year, the value of active capital projects in the country more than halved, falling from $16.7bn to just $7.0bn according to the project-tracking service MEED Projects.

Against this backdrop of project paralysis, the recent award of a contract worth about $450m to OneSubsea, a joint venture of two US oil field service companies Cameron and Schlumberger, is a significant development and sends a message to international oil and gas companies that opportunities still exist amid Libya’s ongoing militia wars.

The contract is part of phase two of the offshore Bahr Essalam field development project, which will deliever gas and condensates from 13 new subsea wells near the coastal town of Sabratha.

Libya has Africa’s largest oil reserves, with 48 billion barrels of proven reserves, according to the US Energy Information Administration.

Clashes between militias loyal to the country’s various political factions and ideological groups have made safe extraction of these hydrocarbon reserves increasingly difficult over recent years.

As a result, current production stands at about 400,000 barrels a day (b/d), a fraction of the 1.6 billion b/d produced before the 2011 uprising.

Progress at Bahr Essalam means that exploitation of offshore resources is still seen as viable investment by international companies, even amid Libya’s political instability and lower global oil prices, and shows that the door is still open for further offshore exploration and development in Libyan waters.

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