Country Analysis: Libya

Jul 31, 2002 02:00 AM

Libya is a major oil exporter, particularly to Europe. With the suspension of UN sanctions against Libya following its extradition of two men suspected in the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland, oil companies are eager to resume and/or expand operations in Libya.

Oil export revenues, which account for about 95 % of Libya's hard currency earnings (and 75 % of government receipts), were hurt severely by the dramatic decline in oil prices during 1998, as well as by reduced oil exports and production -- in part as a result of US and UN sanctions. With higher oil prices since 1999, however, Libyan oil export revenues have increased sharply, to $ 11.0 bn in 2001 and $ 10.6 bn forecast for 2002, up from only $ 6.0 bn in 1998. As a result of strong oil export revenues, Libya's fiscal situation is now significantly in surplus.
Libya has experienced strong economic growth over the past three years. Real gross domestic product (GDP) grew by around 6.5 % in 2000 and 3.1 %-4.3 % in 2001. For 2002, real GDP growth of 3.6 %-4.5 % is expected. Despite this strong economic growth, Libya's unemployment rate remains high, and inflation remains under control (note: the Economist Intelligence Unit in April 2002 stated that Libya actually was in the midst of "significant deflation," although Libyan economic statistics are somewhat unreliable).

Libya's relatively poor infrastructure (i.e. roads and logistics), unclear legal structure, often-arbitrary government decision making process, a bloated public sector (as much as 60 % of government spending goes towards paying public sector employees' salaries), and various structural inflexibilities all have been impediments to foreign investment and economic growth. There are signs that the country now is moving towards a variety of economic reforms and a reduction in the state's direct role in the economy.
In January 2002, Libya devalued the official exchange rate on its currency, the dinar, by 51 % as part of a move towards unification of the country's multi-tier foreign exchange system. The devaluation also aims to increase the competitiveness of Libyan firms and to help attract foreign investment into the country. Besides the official dinar exchange rate, which is used for state transactions (i.e., imports of goods by the government), Libya has a commercial rate and a black market rate. Also in January 2002, Libya cut its customs duty rate by 50 % on most imports in part to help offset the effects of its currency devaluation.

On April 5, 1999, more than 10 years after the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland that killed 270 people, Libya extradited two men suspected in the attack. In response, the United Nations suspended economic and other sanctions against Libya which had been in place since April 1992. US sanctions, including the Iran-Libya Sanctions Act (ILSA) of 1996 (which covers foreign companies that make new investments of $ 40 mm or more over a 12-month period in Libya's oil or gas sectors) remain in effect.
On July 27, 2001, the US Congress voted to extend ILSA for five more years. UN sanctions since 1992 reportedly have cost Libya billions of dollars in lost income, and have made it more difficult for Libya to develop its energy sector. A full lifting of sanctions can occur 90 days after the UN certifies that Libya has met all requirements, including renunciation of support for terrorist acts.
On July 9, 1999, the UN Security Council issued a statement saying that while it "welcomed the significant progress" which Libya had made in complying with UN demands, that at the same time Libya would need to do more (i.e., cooperate with court proceedings, pay compensation to families if the suspects are convicted) before sanctions were lifted permanently.
In late May 2002, Libya was reported to be offering $ 2.7 bn in compensation to families of Pan Am flight 103, with money to be released as UN and US sanctions are lifted. However, a Libyan government spokesman denied the offer.

Libya is hoping to reduce its dependency on oil as the country's sole source of income, and to increase investment in agriculture, tourism, fisheries, mining, and natural gas. Libya's agricultural sector is a top governmental priority. Hopes are that the Great Man Made River (GMR), a five-phase, $ 30-bn project to bring water from underground aquifers beneath the Sahara to the Mediterranean coast, will reduce the country's water shortage and its dependence on food imports.
Libya also is attempting to position itself as a key economic intermediary between Europe and Africa, has become more involved in the Euro-Mediterranean process, and has pushed for a new African Union. In April 2001, members of the Arab Maghreb Union (Algeria, Libya, Mauritania, Morocco, and Tunisia) agreed to encourage intra-regional cooperation on trade, customs, banking, and investment issues. OIL Libya's oil industry is run by the state-owned National Oil Corporation (NOC), along with smaller subsidiary companies.
As of 2000, NOC had an estimated total oil production capacity of around 810,000 bpd, accounting for over half the country's total. Several international oil companies are engaged in exploration/production agreements with NOC. The leading foreign oil producer in Libya is Italy's Agip-ENI, which has been operating in the country since 1959.

Two US oil companies (Exxon and Mobil) withdrew from Libya in 1982, following a US trade embargo begun in 1981. Five other US companies (Amerada Hess, Conoco, Grace Petroleum, Marathon, and Occidental) remained active in Libya until 1986, when President Reagan ordered them all to cease activities there. Conoco, Amerada Hess and Occidental made up the "Oasis Group," which was producing around 850,000 bpd in 1986.
In December 1999, US oil company executives from Oasis plus Marathon travelled to Libya, with US government approval, to visit their old oil facilities in the country. The former head of NOC, Abdullah al-Badri, has stated that if US companies return to Libya, they will return to the fields they used to operate in the country.
However, in the first part of 2001, Libya contacted the US companies and indicated that, given its desire to develop their fields, Libya was considering transferring them to European companies. In September 2001, Libya stated that the US companies must either make use of their concessions within a year or risk losing them. In March 2002, the US State Department said that it would permit Marathon Oil to hold discussions with Libyan officials while sanctions remain fully in place.

Overall, Libya would like foreign company help to increase the country's oil production capacity from 1.5 mm bpd at present to 2 mm bpd over the next five years. This would restore Libya's oil production capacity to the level of the early 1970s.
During the 1970s, the country's revolutionary government imposed tough terms on producing companies, leading to a slide in oilfield investments and oil production. In May 2000, Libya invited around 50 foreign oil and gas companies to ameeting to discuss exploration and production sharing agreements.
In order to achieve its oil sector goals, Libya will require as much as $ 10 bn in foreign investment through 2010. Around $ 6 bn of this is to go towards exploration and production, with the rest going towards refining and petrochemicals. In addition, NOC has earmarked $ 1.5 bn for oil infrastructure investment. In January 2002, NOC appointed Abdel-Hafez Zleitni as its new chairman, with the specific mission to work on attracting foreign investment into the country's oil sector.

Currently, Libya has 12 oil fields with reserves of 1 bn barrels or more each, and two others with reserves of 500 mm-1 bn barrels. Libya's onshore oil (where most production currently takes place) is found mainly in three geological trends of the Sirte Basin:
1) the western fairway, which includes several large oil fields (Samah, Beida, Raguba, Dahra-Hofra, and Bahi);
2) the north-centre of the country, which contains the giant Defa-Waha and Nasser fields, as well as the large Hateiba gas field; and
3) an easterly trend, which has such giant fields as Sarir, Messla, Gialo, Bu Attifel, Intisar, Nafoora-Augila, and Amal.

Despite years of oil production, Libya retains a large untapped oil and gas potential, with only around 25 % of Libya's area covered by agreements with oil companies. This potential is due largely to lack of investment mainly as a result of stringent fiscal terms imposed by Libya on foreign oil companies. NOC priorities for exploration include new areas in the Sirte (i.e., Blocks 25 and 36), Ghadames (i.e., Block 20), and Murzuq basins, plus unexplored areas such as Kufra and Cyrenaica. NOC also hopes to apply modern Enhanced Oil Recovery (EOR) techniques to existing oil fields.
Libya has a relatively narrow continental shelf and slope in the Mediterranean and Gulf of Sirte, which widens in the west in the Gulf of Gabes. The northern part of the Gulf of Gabes, also known as the November Seventh concession, lies on the Libyan-Tunisian border and is rich in oil and gas.

As part of a 1988 settlement to a long-standing territorial dispute, the area (which contains an estimated 3.7 bn barrels of oil and nearly 12 tcf of natural gas is set to be exploited by the Libyan-Tunisian Joint Oil Company (JOC), a 50:50 venture of Libya's NOC and Tunisia's ETAP. The Libyan side of the zone contains the Omar structure, which is estimated to contain more than 65 % of the zone's total oil and gas reserves.
On February 1, 1997, JOC awarded the entire block to a consortium consisting of Saudi Arabia's Nimr Petroleum (55 %) and Malaysia's Petronas (45 %). The companies have a $ 30-mm, 5-year commitment to explore the block. Full development of the concession could cost more than $ 1 bn.

Production, exports, and reserves
Libya produces high-quality, low-sulphur ("sweet") crude oil at very low cost (as low as $ 1 per barrel at some fields). Libyan oil is priced off of Dated Brent, and main export grades include Es Sider (36-370 API), El Sharara (440 API), Zueitina (420 API), Bu Attifel (410 API), Brega (400 API), Sirtica (400 API), Sarir (380 API), Amna (360 API), and El Bouri (260 API). 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 TotalFinaElf; and small volumes to Asian and South African companies.
During the first quarter of 2002, Libyan oil production was estimated at just over 1.3 mm bpd, only about two-fifths of the 3.3 mm bpd produced in 1970. Libya would like to boost oil output, and the suspension of UN sanctions, along with possible changes to Libya's 1955 hydrocarbons legislation, could be helpful in this regard. Sanctions had caused delays in a number of field development and EOR projects, and had deterred foreign capital investment to an extent. Suspension of sanctions means that Libya now can resume purchases of oil industry equipment.

With reserve replacement slipping since the 1970s, Libya's challenge is maintaining production at mature fields (Brega, Sarir, Sirtica, Waha, Zuetina) while at the same time bringing new fields like Murzuq/El Sharara (online in December 1996; reserves of 2 bn barrels; main operator Repsol-YPF, along with Austria's OMV and TotalFinaElf) and Mabruk online.
Libya currently exports about 1.2 mm bpd of oil. Nearly all (about 90 %) of this is sold to European countries like Italy (507,000 bpd in 2001), Germany (208,000 bpd in 2001), France (70,000 bpd in 2001), Spain and Greece. With state-operated oil fields undergoing a 7 %-8 % natural decline rate, Libya depends heavily on foreign companies and workers.

Major foreign companies include Spain's Repsol-YPF (150,000-200,000 bpd of output, mainly at the El Sharara field, plus exploration at blocks NC-186, NC-187, and North-A), Italy's Agip (82,000 bpd mainly from Bu Attifel, plus exploration on block NC-174 and in the el-Bouri offshore field), Austria's OMV, Germany's Veba (50,000 bpd, mainly from its Amal field in Block NC-12), Wintershall, and multinational TotalFinaElf.
Production from Block NC-115 of the Murzuq basin, being developed by Repsol-YPF, TotalFinaElf, and OMV (with 75 % of output going to Libya's NOC), increased to around 75,000 bpd in early 1998, and 160,000 bpd as of October 2001. In January 1999, Repsol (now Repsol-YPF) said that it had found an "important" petroleum deposit of light, sweet (low sulphur) oil in the Block.
In December 2001, Repsol-YPF (along with OMV, TotalFinaElf and Saga Petroleum) announced that it had discovered a significant new oil deposit in Block NC-186 of Murzuq. Also, in April 2002, the same Repsol-YPF consortium announced its first discovery in the NC-190 block of Murzuq, in the Hawaz formation. Libya is actively courting foreign oil companies, and is considered a highly attractive oil province due to its low cost of oil recovery, its proximity to European markets, and its well-developed infrastructure.

European companies reportedly are growing frustrated over the slow pace of progress in awarding Libyan oil concessions, including the 130 exploration blocks offered since UN sanctions were lifted in 1999. As of March 2002, only five packages reportedly had been awarded. In April 2002, Libya signed an agreement with China to offer Chinese companies a wider role in the Libyan oil sector.
Of NOC's subsidiaries, the largest oil producer is the Waha Oil Company (WOC), created in 1986 to take over operations from Oasis Oil, a joint venture of NOC, Conoco, Marathon, and Amerada Hess. WOC has been among the companies most adversely affected by the US embargo. This is due to the fact that its oilfields are equipped mainly with old US equipment, for which WOC cannot now acquire needed spare parts. As a result, production at WOC's giant Waha field has fallen sharply despite an emergency maintenance program begun in 1992.
After Waha, the next largest NOC subsidiary is the Arabian Gulf Oil Company (Agoco), with production coming mainly from the Sarir, Nafoora/Augila, and Messla fields. Two other large NOC subsidiaries are the Zueitina Oil Company (ZOC), which operates the five Intisar fields in Block 103 of the Sirte Basin, and the Sirte Oil Company (SOC), originally created in 1981 to take over Exxon's holdings in Libya. In 1986, SOC took over the assets of Grace Petroleum, one of the five US companies forced by the US government to leave Libya in 1996.

SOC operates the Raguba field in the central part of the Sirte Basin. The field is connected by pipeline to the main line between the Nasser field and Marsa el-Brega. Nasser is one of the largest oilfields in Libya, with production of about 50,000 bpd of oil, down from 70,000 bpd in 1992. Besides Nasser, SOC is in charge of two other gas fields -- Attahaddy and Assumud -- plus the Marsa el-Brega LNG plant.
Libya's oilfields are connected to Mediterranean terminals by an extensive network of pipelines. Libya's main crude oil pipelines, all owned by NOC, are: Sarir-Marsa el Hariga (Tobruk); Messla-RasLanuf; Waha-Es Sider; Hammada El Hamra-Az Zawiya; Amal-Ras Lanuf; Intisar-Zueitina; Nasser (Zelten)-Marsa El Brega. NOC also has six oil terminals and storage facilities (Marsa El Hariga, Zueitina, Marsa el-Brega, Ras Lanuf, Es Sider, Zawiya), and is considering bids for a $ 150 mm-$ 300 mm expansion of the oil terminal and refinery facility at Az Zawiya.

Exploration and development
Oil exploration in Libya began in 1955, the key national Petroleum Law No. 25 was enacted in April 1955. Libya's first oil fields were discovered in 1959 (at Amal and Zelten -- now known as Nasser), and oil exports began in 1961. After years of little activity due in part to sanctions, Libya now is attempting to attract foreign companies with improved incentives and production terms.
Libya has legislation pending which would grant foreign firms better terms, including access to exploration acreage, small field developments, large field incremental production opportunities, and adoption of international competitive bidding practices. Currently, only around 25 % of the country's oil fields have been granted to foreign operators (although Libya does plan to open up some 40 blocks in the Sirte basin and other areas to foreign investment).

In July 2000, NOC said that it would open up around 70 % of its land to exploration, and that it would bundle exploration blocks into three packages, with the first package to include blocks in the oil-rich Murzuq basin. The major component of Libya's expansion plans is development of the el-Bouri offshore oilfield off Libya's western coast, the largest producing oilfield in the Mediterranean Sea (at around 60,000 bpd).
Italy's Agip-ENI is the developer of the field, discovered in 1976 at a depth of 8,700 feet and estimated to contain 2 bn barrels in proven recoverable crude oil reserves. The first phase of field development, costing $ 2 bn, was completed in 1990, with el-Bouri producing about 150,000 bpd in 1995, with a sharp decline thereafter. This decline was due largely to an inability to import EOR equipment under UN sanctions, and possibly could be reversed with an infusion of investment. Besides oil, el-Bouri also contains large amounts (2.5 tcf) of associated gas.

Since the discovery of the giant, 2-bn barrel el-Bouri field, Agip-ENI has reported a series of oil finds in its various blocks, as have other oil companies in the country. The most significant of these is in the Murzuq basin, in the Sahara south of Tripoli. El Bouri was purchased by Repsol in 1993 for $ 65 mm. Repsol-YPF currently is leading a European consortium, which also consists of OMV and TotalFinaElf.
Original expectations were that Murzuq/El Sharara's output of light (440 API), sweet (less than 0.6 % sulphur content) crude production would reach 200,000 bpd by the end of 1998, but various problems, including difficulties with the pipeline to the port of Az Zawiya, delayed achievement of this target. Currently, oil from Murzuq/El Sharara is being processed by the Az Zawiya refinery.

In October 1997, an international consortium led by British company Lasmo (with a 33.3 % stake), along with Agip-ENI (33.3 %) and a group of five South Korean companies (led by Korea National Oil Corp., replacing Pedco, and including Hyundai), announced that it had discovered large recoverable crude reserves (around 700 mm barrels) at the NC-174 Block, 465 miles south of Tripoli, in the remote Murzuq basin.
Lasmo has estimated that production from the field, which it has named Elephant, will cost around $ 1 per barrel (Repsol-YPF's Murzuq/El Sharara field, with its 30-inch pipeline to the coast, is located only 40 miles to the north). According to Lasmo, appraisal drilling in 1998 has confirmed recoverable reserves of around 560 mm barrels.
Elephant originally was due to begin production late in 2000 at around 50,000 bpd, and to utilize an existing 30-inch pipeline located 42 miles to the north. Production start-up now has been delayed, reportedly due to bureaucratic obstacles, at least until the end of 2002. Production at Elephant is expected to reach 150,000 bpd within a year or two of start-up.

Other foreign companies active in Libya include:
-- Lundin Oil, a Swedish independent, along with its affiliate Red Sea Oil of Canada, has discovered an estimated 84 mm barrels of oil at the En Naga North and West fields on block NC-177 in the Sirte basin (in December 1999, Red Sea announced that testing on the block had been suspended);
-- TotalFinaElf, whose Mabruk field is producing around 18,000 bpd; and
-- Canadian Occidental, which controls but has not yet developed a potential 200-mm-barrel field in Block NC-101 in the Murzuq basin.
In June 2001, Petro-Canada agreed to purchase Lundin's interest in the En Naga block. In November 2001, TotalFinaElf reportedly was negotiating with NOC to increase production at Mabruk, possibly to 30,000 bpd.

Libya has three domestic refineries, with a combined nameplate capacity of approximately 343,400 bpd, nearly twice the volume of domestic oil consumption (182,000 bpd; the rest is exported).
Libya's refineries include:
1) the Ras Lanuf export refinery, completed in 1984 and located on the Gulf of Sirte, with a crude oil refining capacity of 220,000 bpd;
2) the Az Zawiya refinery, completed in 1974 and located in north-western Libya, with crude processing capacity of 120,000 bpd; and
3) Brega, the oldest refinery in Libya, located near Tobruk with crude capacity of 8,400 bpd.

In February 2001, bids were submitted by engineering and construction firms on a $ 400 mm project to upgrade Az Zawiya (including construction of a new 120,000-bpd refinery). In May 2002, Libya signed a $ 280 mm contract with South Korea's LG Petrochemicals to upgrade the refinery. Ras Lanuf also is slated for upgrading, although that project appears to have been delayed.
In March 2002, Ras Lanuf was shut down for several days after a fire broke out at an ethylene storage tank on March 19. In addition to its domestic refineries, Libya also has operations in Europe. Libya is a direct producer and distributor of refined products in Italy, Germany, Switzerland, and (since early 1998) Egypt.
In Italy, Tamoil Italia, based in Milan, controls about 5 % of the country's retail market for oil products and lubricants, which are distributed through nearly 2,100 Tamoil service stations. Sanctions have constrained Libya's ability to increase the supply of oil products to European markets, however, as Libya's refineries are badly in need of upgrading, especially in order to meet stricter EU environmental standards in place since 1996.

In Egypt, Libya is planning to build gasoline stations on the coastal road linking the two countries as well as in other areas of Egypt. The stations are to be run by Libya's foreign oil investment arm Oilinvest, which maintains 300,000 bpd of refining capacity in Europe. Libya's refining sector reportedly was hard hit by UN sanctions, specifically UN Resolution 883 of November 11, 1993, which banned Libya from importing refinery equipment.
Libya is seeking a comprehensive upgrade to its entire refining system, with a particular aim of increasing output of gasoline and other light products (i.e. jet fuel). Possible projects include a new 20,000-bpd refinery in Sebha (for which Libya is seeking foreign investment), which would process crude from the nearby Murzuq field, and a 200,000-bbl/d export refinery in Misurata.

Natural gas
Continued expansion of natural gas production remains a high priority for Libya for two main reasons:
-- First, Libya has aimed (with limited success) to use natural gas instead of oil domestically, freeing up more oil for export.
-- Second, Libya has vast natural gas reserves and is looking to increase its gas exports, particularly to Europe.

Libya's proven natural gas reserves in 2002 are estimated at 46.4 tcf, but the country's actual gas reserves are largely unexploited (and unexplored), and thought by Libyan experts to be considerably larger, possibly 50-70 tcf. Major producing fields include Attahadi, Hatiba, Zelten, Sahl, and Assumud. To expand its gas production, marketing, and distribution, Libya is looking to foreign participation and investment. In recent years large new discoveries have been made in the Ghadames and el-Bouri fields, as well as in the Sirte basin. Libya also produces a small amount of LPG, most of which is consumed by domestic refineries.
Libyan natural gas development projects currently underway include as-Sarah and Nahoora, Faregh, Wafa, offshore block NC-41, abu-Attifel, Intisar, and block NC-98. In May 2000, NOC reportedly came out with a framework for gas exploration in the country, under which NOC would have first priority to the foreign company's gas share at an agreed discount.

In December 2000, NOC announced that it had discovered a 472-bn cf gas field in the Sirte basin, northwest of Assumud. Potential exists for a large increase in Libyan gas exports to Europe, although at present the only customer for Libyan gas is Spain's Enagas. A joint venture between ENI and NOC on the Western Libyan Gas Project (WLGP), a $ 4.6 bn plan aimed at developing and exporting large volumes of natural gas to Italy, is moving ahead.
In June 2002, for instance, ENI affiliate Saipem was awarded a $ 500-$ 550 mm contract to build and install an offshore natural gas platform northwest of Tripoli. In February 2002, $ 1 bn worth of engineering, procurement and construction contracts were awarded to a consortium led by Japan's JGC and including France's Sofregaz and Italy's Technimont. The consortium will work on oil and natural gas infrastructure in the Wafa Desert and near Melitah on the Mediterranean coast.
Overall, the WLGP calls for Libya to export 8 bn cm (280 bn cf) per year of natural gas from a processing facility at Melitah to Italy and France over 24 years, beginning in 2004, via a 370-mile underwater pipeline (called "Green Stream") under the Mediterranean to south-eastern Sicily and the Italian mainland.

Todate, Italy's Edison Gas has committed to taking around half (140 bn cf) of this gas, and to use it mainly for power generation in Italy. Besides Edison, Italy's Energia Gas and Gaz de France have each committed to taking around 70 bn cf of Libyan gas. As part of the overall WLGP, Agip-ENI is set to develop huge Libyan gas reserves in offshore Block NC-41 in the Gulf of Gabes, as well as in the Wafa onshore gas (and oil) field on the Algerian border.
Feasibility studies have been completed on Wafa and NC-41, and gas is expected to begin flowing by mid-2004. The project also is expected to produce condensates estimated at around 70,000 bpd oil equivalent.
Agip-ENI also has promoted linking the reserves of both Egypt and Libya to Italy by pipeline. An agreement in principle to link Egypt and Libya's natural gas grids was reached in June 1997, following a visit to Libya by Egyptian President Hosni Mubarak.
In early May 2002, Egypt's Oil Minister said that ground work on a double pipeline to carry Egyptian natural gas to Libya (for power generation, water desalination, and possible export) and another to carry Libyan oil to Alexandria, Egypt for refining and consumption there).

Yet another proposal is to build a nearly 900-mile pipeline from North Africa to southern Europe. Such a pipeline could transport natural gas from Egypt, Libya, Tunisia and Algeria, via Morocco and into Spain (a pipeline between Morocco and Spain already exists).
Also, Tunisia and Libya agreed in May 1997 to set up a joint venture which will build a natural gas pipeline from the Mellita area in Libya to the southern Tunisian city and industrial zone of Gabes. In late 1998, Tunisia and Libya signed an agreement for around 70 bn cf of gas per year to be delivered from Libyan gas fields to Cap Bon, Tunisia beginning in 2003.

In 1971, Libya became the second country in the world (after Algeria in 1964) to export LNG. Since then, Libya's LNG exports have generally languished, largely due to technical limitations which do not allow Libya to extract LPG from the LNG, thereby forcing the buyer to do so. Libya's LNG plant, at Marsa El Brega, was built in the late 1960s by Esso and has a capacity of 124 bn cf per year, but due to technical limitations only about one-third of this is available for export, mainly to Enagas of Spain.
Work to refurbish and upgrade the El Brega LNG plant in order to deal with the LPG separation problem has been delayed since 1992. If completed, Libyan LNG exports could triple, with likely customers including Spain, Turkey and Italy. On February 1, 2002, Libya joined the Gas Exporting Countries Forum (GECF), formed in 2001 to promote cooperation in the world natural gas industry. Members of the GECF account for around three-fourths of world natural gas reserves and three-fifths of exports.

Electric power
Libya currently has electric power production capacity of about 4.6 GW. Power demand is growing rapidly (around 6 % annually), and Libya has plans to more than double installed capacity by 2010 at a cost of over $ 3.5 bn. As of July 2002, however, little progress has been made towards achieving this goal, nor does Libya have any plans at present to privatise its power sector.
Most of Libya's existing power stations are oil-fired, though several have been converted to natural gas. Plans to utilize natural gas include the 600-MW Western Mountain Power Project (Italy's Enelpower has been announced as the preferred bidder), an 800-MW power plant in Zuwara on the west coast, a 1,400-MW power plant to be located on the coast between Benghazi and Tripoli (Enelpower is bidding on this plant as well), and the 1,200-MW "Gulf Stream" combined power and desalination complex in Sirte (France's Alstom appears to be the lead bidder). In February 2002, Russia's Tekhnopromexport signed a $ 600 mm deal with Libya to build a 650-MW power plant.

Libya's state-owned General Electricity Company (GEC) has hinted at the possibility of allowing private investment in the country's power generation anddistribution. The country's power sector requires substantial investment, and officials are looking at alternatives to public financing, but despite this, it remains unlikely that Libya will undertake any large-scale power privatisation or allow independent power projects (IPPs) anytime soon. Meanwhile, the Export-Import Bank of South Korea reportedly has guaranteed $ 99 mm of the $ 299 mm cost of an expansion and upgrading project at the 450-MW Benghazi North power plant.
The project would double the plant's capacity and convert it to combined cycle. GEC's biggest current project is to expand Libya's network of power substations, which are concentrated mainly in Benghazi, Sebha, and Tripoli. In other news, Libya, Egypt, and Tunisia have finished linking their power grids.

Country overview
President (Chief of State): Mu'ammar Qadhafi (since September 1, 1969) Independence: December 24, 1951 (from Italy)
Population (2001E): 5.2 mm
Location/size: North Africa/1,775,500 sq km (685,524 sq mi), slightly larger than Alaska
Major cities: Tripoli (capital), Benghazi, Misurata
Languages: Arabic; Italian and English widely understood in major cities
Ethnic groups: Arab (97 %)
Religions: Sunni Muslim (97 %)
Defence (1998E): Army (35,000), Air Force (22,000), Navy (8,000)

Economic overview
Secretary of the Gen. People's Committee for Economy and Trade: Shukri Muhammad Ghanim
Currency: Libyan Dinar (LD)
Official exchange rate (1/1/02): $ 1 = 1.30 LD
Parallel market exchange rate (April 2002): around $ 1 = 1.57 LD
Gross Domestic Product (GDP) (2001E; official exchange rate): $ 31.2 bn (2001E: parallel market exchange rate): $ 11.6 bn
Real GDP growth rate (2001E): 3.1 %-4.3 % (2002E): 3.6 %-4.5 %
Inflation rate (consumer prices, 2001E): -8.5 % (1Q2002E): 5 %
Unemployment rate (1998E): around 30 %
Current account balance (2001E): $ 2.0 bn
Main destinations of exports (2000E): Italy (42 %), Germany (19 %), Spain (13 %), France (6 %)
Main origins of imports (2000E): Italy (25 %), Germany (10 %), Tunisia (8 %), UK (7 %)
Merchandise exports (2001E): $ 7.5 bn (2002E): $ 8.0 bn
Merchandise imports (2001E): $ 4.5 bn (2002E): $ 4.9 bn
Merchandise trade balance (2001E): $ 3.0 bn (2002E): $ 3.1 bn
Major export products: Crude oil, refined petroleum products, natural gas
Major import products: Manufactured goods, food and primary products
Total external debt (non-military) (2001E): $ 4.4 bn
International reserves (12/01E): $ 14.8 bn (17 months worth of import cover)

Energy overview
Chairman of the National Oil Company: Abdel-Hafez Zleitni
Proven oil reserves (1/1/02): 29.5 bn barrels
OPEC crude oil production quota (effective 1/1/02) : 1.162 mm bpd
Oil production capacity (2Q 2002E): 1.5 mm bpd
Oil production (2001E): 1.43 mm bpd, of which 1.37 mm bpd was crude oil, and 60,000 bpd was natural gas liquids
Oil consumption (2001E): 182,000 bpd
Net oil exports (2001E): 1.25 mm bpd
Major oil customers (2000E): Italy, Germany, Spain, and France combined account for around three-quarters of Libya's oil exports; other customers include Austria, Greece, Britain, and Switzerland
Crude oil export revenues (2000E): $ 12.9 bn (2001E): $ 12.5 bn
Oil export revenues/total export revenues (2000E): 98 %
Crude oil refining capacity (1/1/02E): 343,400 bpd
Natural gas reserves (1/1/02): 46.4 tcf
Natural gas production (2000E): 0.21 tcf
Natural gas consumption (2000E): 0.18 tcf
Electric generation capacity (2000E): 4.6 GW (all thermal)
Electricity generation (2000E): 19.4 TWh

Environmental overview
Total energy consumption (2000E): 0.58 quadrillion Btu* (0.15 % of world total energy consumption)
Energy-related carbon emissions (2000E): 10.9 mm tons of carbon (0.2 % of world carbon emissions)
Per capita energy consumption (2000E): 109.6 mm Btu (vs. US value of 348.9 mm Btu)
Per capita carbon emissions (2000E): 2.1 tons of carbon (vs. US valueof 5.7 tons of carbon)
Energy intensity (2000E): 18,412 Btu/$ 1995 (vs. US value of 10,919 Btu/$ 1995)**
Carbon intensity (2000E): 0.35 tons of carbon/thousand $ 1995 (vs. US value of 0.17 tons/thousand $ 1995)**
Sectoral share of energy consumption (1998E): Transportation (48.4 %), industrial (45.8 %), residential (5.8 %), commercial (0.0 %)
Sectoral share of carbon emissions (1998E): Transportation (53.7 %), industrial (40.6 %), residential (5.6 %), commercial (0.0 %)
Fuel share of energy consumption (2000E): Oil (65.5 %), natural gas (34.5 %)
Fuel share of carbon emissions (1999E): Oil (67.8 %), natural gas (32.1 %)
Renewable energy consumption (1998E): 66.5 t Btu* (1,278 % increase from 1997)
Number of people per motor vehicle (1998): 4.8 (vs. US value of 1.3)
Status in climate change negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified June 14th, 1999). Not a signatory to the Kyoto Protocol.
Major environmentalissues: Desertification; very limited natural fresh water resources; the Great Manmade River Project, the largest water development scheme in the world, is being built to bring water from large aquifers under the Sahara to coastal cities.
Major international environmental agreements: A party to Conventions on Desertification, Marine Dumping, Nuclear Test Ban and Ozone Layer Protection. Has signed, but not ratified, Biodiversity, Climate Change and Law of the Sea.

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 2000

Oil and gas industries
State oil companies: Libyan National Oil Company (NOC) -- Manages the state-owned oil industry and controls over 70 % of Libya's oil production; Oilinvest -- Manages all international investments
Foreign energy company involvement: Agip (Italy), Canadian Occidental, ENI (Italy), Husky Oil (Canada), Lasmo (UK), Lundin Oil (Sweden), Nimr Petroleum (Saudi Arabia), OMV (Austria), PanCanadian; Pedco (South Korea), Petrobras (Brazil), Petro-Canada (Canada), Petronas (Malaysia), Red Sea Oil (Canada), Repsol-YPF (Spain), Saga (Norway), Shell; TotalFinaElf (France), Veba (Germany), Wintershall (Germany)
Major oil ports: Es Sider, Zuetina, Tripoli
Major oil and gas fields: Amal, el-Bouri, Bu Attifel, Defa-Waha, Elephant, Kabir, Mabruk, Murzuq, Nasser, Omar, Sarah, Zueitina
Major pipelines: Amal-Ras Lanuf; Defa-Nasser; Hammada el Hamra-Az Zawiya; Intisar-Zueitina; Intisar -Hatiba; Messla-Ras Lanuf; Nasser-Hatiba; Nasser (Zelten)-Marsa el Brega; Sarir-Marsa el Hariga; Waha-Es Sider
Major refineries (crude oil capacity): Ras Lanuf (220,000 bpd), Az-Zawiya (115,000 bpd), Brega (8,400 bpd)

Source: EIA
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