Courtesy of The Wall Street Journal, a report on how Halliburton and Honeywell are in advanced talks to develop oil fields and refineries in Libya; Eni importing more oil and gas from Algeria:

After years of underinvestment in North Africa’s energy infrastructure, global oil-and-gas giants from Halliburton Co. and Chevron Corp. to Eni SpA are ramping up their presence in the region as demand from Europe grows.

Executives in the industry are betting it is worth drilling again in some of the hardest places to do business in the world as Europe increasingly turns to other sources for its energy needs after shunning its main supplier, Russia, over the invasion of Ukraine. In recent months, a string of European officials have visited the region to help advance talks over potential supply deals.

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, which has the largest known oil reserves in Africa, according to the chairman of state-owned firm, Farhat Bengdara. Italy’s Eni is planning investments aimed at replacing nearly half of the gas it was importing from Russia with gas from Algeria.

Chevron is also looking to seal an energy exploration deal in Algeria, The Wall Street Journal reported last month. In January, the U.S. oil major announced a sizable natural-gas discovery in Egypt.

“North Africa has been slow to develop its potential because of political risks, either related to insecurity or bureaucracy,” said Geoff Porter, president of U.S.-based North Africa Risk Consulting Inc. But with Europe needing to replace Russian energy, “this is their moment,” he said.

Western oil executives say they see a more stable political climate in North Africa, especially in countries such as Libya where fighting between local militias has been subdued in the past two years following nearly a decade of civil war. Many American firms had pulled back from the region, viewing it as politically too risky, to focus on shale production at home. The region’s proximity to Europe and massive reserves, with Algeria holding the third-largest recoverable shale resources in the world, also make doing business there worth the risk, they say.

At the same time, state-owned firms in the North African region have been eager to strike deals, as they see an opportunity to fill a gap left by Russia and take advantage of higher global commodity prices. Some countries, such as Egypt, are eager to bring in additional revenue from selling energy, as their economies struggle with higher import costs including for food. The Ukraine war has disrupted shipments and pushed up global commodity prices.

“I think we can be a good replacement for Russian gas to Europe,” NOC’s Mr. Bengdara said.

The Libyan state-owned company is expected to soon sign a $1 billion agreement with Halliburton that will allow the U.S. firm to rebuild the al-Dhara oil field, according to Mr. Bengdara. The oil field in central Libya was destroyed by Islamic State militants in 2015 and is now run by ConocoPhillips and TotalEnergies SE, Mr. Bengdara said. It would be one of the biggest deals for the U.S. oil-services giant clinched in the Middle East and North Africa in recent years.

Halliburton and Total didn’t respond to requests for comment. ConocoPhillips declined to comment.

Libya’s NOC and Honeywell are set to unveil a contract related to the construction of a refinery in southern Libya, Mr. Bengdara and a spokesman for the American firm said. 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.

Libya relies heavily on its oil resources for income, although it has struggled for years to turn its own crude into motor fuel, making it largely dependent on costly gasoline imports.

As of last year, the North African nation was divided politically again, with a United Nations-appointed prime minister, Abdul Hamid Dbeibeh, remaining in control of the capital Tripoli and a rival prime minister taking charge of the country’s east. The country is again pushing to hold presidential and legislative elections this year, after plans fell through in 2021.

Still, there have been no serious clashes since last summer and its eastern government in recent months has unlocked some of the budget needed by the state oil company to clinch deals with international companies.

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.

The U.S. also pressured a top Libyan commander in mid-January to expel Russia’s paramilitary Wagner Group, the Journal reported last month, amid fears the unit may tap into the country’s oil riches. Khalifa Haftar, commander of a faction that controls eastern Libya, is aligned with the government in Tripoli.

“There is recognition in the U.S. that Libya is a workable environment,” said Mr. Porter, who advises U.S. oil companies in the region. He added that firms now see it 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.”

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.

In January, NOC and Eni, which produces the majority of the country’s gas, signed an $8 billion deal for the Italian energy giant to develop two gas fields to pump 850 million cubic feet a day for 25 years. Under the agreement, production of gas will start in 2025, ramping up to full capacity of 850 million cubic feet a day by 2026.

In Algeria, Eni is aiming to export an additional 3 billion cubic meters of gas annually, starting this year, to help make up for gas that used to flow from Russia. Algeria will become the firm’s top region for investment in the next four years.

“Algeria is a reliable partner of absolute strategic importance,” said Italian Prime Minister Giorgia Meloni during a visit to Algiers in January.

From Egypt, Eni aims to export three billion cubic meters of liquefied natural gas to Italy starting this year, after regas capacity was built up on the receiving end. That compares with roughly 1 billion cubic meters being exported last year.

Egypt’s ability to export gas is limited given the growing electricity demand of its more than 100 million population. It doesn’t have any pipelines to Europe. Still, the country has ambitions to become a hub for energy distribution in the Mediterranean, importing more gas from Israel and exporting liquefied gas on ships to Italy.