GlobalData have said that Libya’s oil and gas industry continues to be unpredictable, similarly to its politics following the 2011 ouster of Muammar Gaddafi. Current oil and gas output levels are remaining low, according to a GlobalData analyst Will Scargill, covering Upstream Oil & Gas.
MENA, Libya and the oil industry
The MENA region, economic, political and social divisions, combined with an unstable security environment is stifling the oil industry when the country needs it most. Also, labour strikes and disagreements between different social and political groups have shut down oil production and export.
Despite problems, Libya is still the source of over 10% of production for many international oil companies (IOCs). Also, operations recovered quickly following the conflicts in 2011, although recent disruptions at oil export terminals in the country have reduced output to as low as 230 000 bpd in September of this year. At the start of this month, production was near 600 000 bpd, well below the 2012 levels of 1.4 million bpd.
Legislation and investment
Scargill has said, ‘European IOCs have invested significantly in their Libyan holdings and are keen on monetising their investment. However, in a sign of losing patience, Marathon has signalled that it is considering selling its share. Additionally, BP has yet to resume activity on its three exploration blocks in the country.’
It has been suggested that Libya’s political divisions will have a long lasting effect on the oil and gas industry, as the country moves toward creating a new exploration and production sharing agreement in an attempt to attract more investment. Such divisions, and the lack of a constitution, are placing roadblocks for the legislation required. This means that a new licensing round could be further delayed, possibly into 2015. The round was originally planned for late this year, and the most recent date schedule was early next year.
‘This will disappoint both the Libyan government, which needs to reignite its core industry and attract investment, and the IOCs, which are expecting the EPSA-V to offer improved terms on a large resource pool close to home,’ concluded Scargill.
Adapted from press release by Claira Lloyd
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