PrintLibya relies on oil and natural gas to satisfy energy consumption demand. Economic growth in Libya is dependent on the hydrocarbon industry.
According to the World Bank, the country’s hydrocarbon exports account for over 95 percent of total merchandize exports and revenues from the oil and natural gas sectors amount to over half of the country’s gross domestic product (GDP).
Since the United Nations and the United States lifted sanctions over Libya in 2003 and 2004, respectively, oil majors have stepped up exploration efforts for oil and natural gas in the country.
Likewise, companies have tried using enhanced oil recovery (EOR) techniques to increase production at maturing fields. Over the next six years, Libya would like to see oil production capacity increase by 40 percent from 1.8 million barrels per day (bbl/d) to 3 million bbl/d by 2013.
Oil
Libya has the largest proven oil reserves in Africa. The country hopes to increase oil production capacity through increasing exploration and EOR projects.
Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), holds the largest proven oil reserves in Africa, followed by Nigeria and Algeria (see graph below).
According to Oil and Gas Journal (OGJ), Libya had total proven oil reserves of 41.5 billion barrels as of January 2007, up from 39.1 billion barrels in 2006. About 80 percent of Libya’s proven oil reserves are located in the Sirte basin, which is responsible for 90 percent of the country’s oil output.
Libya remains "highly unexplored" according to reports by Wood Mackenzie, and only around 25 percent of Libya is covered by exploration agreements with oil companies. The under-exploration of Libya reflects the impact of former sanctions and also stringent fiscal terms imposed by Libya on foreign oil companies.
Production
According to the International Crude Oil Market Handbook, Libya’s National Oil Company (NOC) would like to raise oil production from 1.80 million bbl/d in 2006 to 2 million bbl/d by 2008 and to 3 million bbl/d by 2010-2013.
In large part, NOC’s production goals depend on its ability to finance its share of development costs. Future foreign investment into the oil sector is likely, especially with the improved investment climate that stems from the United Nations and United States lifting sanctions.
Previously, sanctions had caused delays in a number of field development and EOR projects and had deterred foreign capital investment. Overall, Libya is considered a highly attractive oil province due to its low cost of oil recovery (as low as $1 per barrel at some fields), the high quality of its oil, and its proximity to European markets.
Exports
With domestic consumption of 284,000 bbl/d in 2006, Libya had estimated net exports (including all liquids) of 1.525 million bbl/d.
According to 2006 official trade data as reported to the Global Trade Atlas, the vast majority of Libyan oil exports are sold to European countries like Italy (495,000 bbl/d), Germany (253,000 bbl/d), Spain (113,000) bbl/d and France (87,000 bbl/d). With the lifting of sanctions against Libya in 2004, the United States has increased its imports of Libyan oil. The United States imported an average of 85,500 bbl/d of total Libyan oil exports in 2006, up from 56,000 bbl/d of oil imports in 2005.
Libyan oil is generally light (high API gravity) and sweet (low sulfur content), but can also be thick and waxy. The country's nine export grades have API gravities that range from 26o – 44o. While the lighter, sweeter grades are generally sold to Europe, the heavier crude oils are often exported to Asian markets.
Most Libyan oil is sold on a term basis, including to the country's Oilinvest marketing network in Europe; to companies like Agip, OMV, Repsol YPF, Tupras, CEPSA, and Tot
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