Global Energy Review
Libya
Libya's oil production has fallen considerably since its peak in 1970, when it was 3.3 mn bpd. Commercial production only began in 1959 but rose rapidly thanks to abundant reserves and one of the most benign systems of oil taxation in the world. The rapid rise in output led at first to a high rate of depletion. Production began to decline and was further curbed by a rise in taxes on foreign oil companies and a change in licensing arrangements, which ended the concession system. Libyan attempts to revive oil production since then have been hampered by sanctions on trade and technology transfer, starting with a US trade embargo in 1981 and the complete withdrawal of American oil companies in 1986 as a result of a US presidential decree. UN sanctions were imposed between 1992 and 1999. Whilst these did not ban foreign oil investment they prevented the import by Libya of advanced oil technology. There is now growing foreign interest in Libya as an oil province, though US companies remain banned from investing there under the Iran Libya Sanctions Act (ILSA) of 1996 (see US Energy Information Agency - World Energy Sanctions, US Treasury - Sanctions Program.
While many foreign companies are highly positive about Libyan geology, there is rather less enthusiasm amongst their number for the present licensing arrangements. Foreign firms complain particularly about the restrictions imposed on their production by Libya to enable it to meet its OPEC quotas.
The government is well aware of foreign criticisms and is trying to improve upstream terms and conditions. There are now fairly firm proposals to raise crude-oil production by 200,000 bpd by 2005, including the commissioning of ENI's repeatedly delayed 760mn-bbl Elephant field. In addition, Libya's 60,000 bpd of NGL production should be augmented by a further 50,000 bpd from ENI's West Libya Gas Project.
In a further effort to encourage foreign investment, the Libyans have indicated that they will allow the US oil companies that were forced to leave the country in the 1980s to reclaim their former upstream assets. The USA has failed so far to give a positive response. ILSA is due to expire in 2006 unless renewed beforehand.
Production Outlook
With a combination of new production and enhanced oil recovery (EOR), Libya hopes to raise its crude-oil production to 2 mn bpd by about 2008 and to 3 mn bpd in 2018. The 2mn-bpd target appears overoptimistic, even by 2010, though liquids' production could then include some 0.1 mn bpd of NGL output.
Crude-oil production is forecast as follows:
| 2003 | 1.4 mn bpd |
| 2010 | 1.8 mn bpd |
Libya, Reserves & Production, 2003
| Reserves: | 29.5 bn bbl |
| Reserves remaining: | 56.9 years |
| Production capacity: | 1.50 mn bpd |
| OPEC Quota (Nov '03): | 1.31 mn bpd |
| Production: | 1.42 mn bpd |
| Consumption: | 0.16 mn bpd |
| Net trade: | 1.26 mn bpd |
| Peak output | 3.3 mn bpd |
| Peak year | 1970 |
Production 1991-2003
OET Archive
External links
- Libyan National Oil Corporation [ http://www.noclibya.com/ ]
- Arabian Gulf Oil Company - Libya [ http://www.agocoil.com/oilinlibya.htm ]
- Waha Oil [ http://www.wahaoil.com/ ]
- Petroleum Research Company Libya [ http://www.prclibya.org/ ]
