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Repsol Restarts Oil Exploration in Libya After a Decade

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The Spanish energy giant,Repsol, S.A. (REPYY - Free Report) , recently returned to Libya’s energy scene with its exploration activities in the Murzuq Basin after a hiatus of more than a decade. On Dec. 31, 2024, the company spudded its first exploration well, A1-2/130 (Muammal Nasr), marking its first step in drilling in Libya since 2014.

Strategic Importance of REPYY’s A1-2/130 Well

The A1-2/130 well is located about 800 km south of Tripoli and just 12 km from the prolific Sharara oil field. It is planned to be drilled to a total depth of 1,844 meters (6,050 feet). If this drilling and exploration activity turns out successful, the company also expects to tie back to this asset in the future.

Sharara is Libya’s biggest oilfield, with a production capacity of 320,000 barrels per day. Repsol is also a partner in Sharara with other eminent stakeholders like NOC, TotalEnergies, OMV and Equinor.

Overview of Libya’s Favorable Investment Climate

Libya’s state-owned National Oil Corporation (NOC) has issued its plan to offer 22 onshore and offshore exploration blocks to revitalize the country’s energy sector by increasing foreign investment. Expected to start in early 2025, the plan highlights the country’s efforts to revive its oil industry and the overall economic expansion.

In 2024, the country’s crude oil production touched its highest levels since 2013 and surpassed 1.4 million barrels per day (bpd). The country has set targets to further increase production levels in the years to come by creating a favorable investment scenario for international energy companies.

Many foreign investors are returning to Libya, validating confidence in the country’s energy sector. Companies like Eni and BP are about to drill their first exploration well in Libya. The bid round by the country will further unlock opportunities for many more new projects and partnerships.

As Repsol enters into exploration activities in Libya, the company’s operations are expected to contribute significantly to regional economic growth, further cementing its role in the global energy landscape.

REPYY’s Zacks Rank and Key Picks

Repsol explores, develops and produces crude oil products and natural gas. It also transports petroleum products and liquefied petroleum gas and refines petroleum. Currently, REPYY has a Zacks Rank #5 (Strong Sell).

Investors interested in the energy sector might look at some better-ranked stocks like TechnipFMC plc (FTI - Free Report) ,KLX Energy Services Holdings, Inc. (KLXE - Free Report) and Flotek Industries, Inc. (FTK - Free Report) . While TechnipFMC currently sports a Zacks Rank #1 (Strong Buy), KLX Energy and Flotek Industries each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

London-based TechnipFMC plc is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The Zacks Consensus Estimate for FTI’s 2024 earnings indicates 260% year-over-year growth.

KLX Energy Services Holdings provides oilfield services focused on the wells’ completion, intervention and production activities. KLXE’s expected EPS (earnings per share) growth rate for next year is 28.52%, which aligns favorably with the industry growth rate of 15.10%.

Flotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2024 earnings indicates 125% year-over-year growth.

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