Libya's oil reserves

Summary: The north African country of Libya has an abundance of energy resources and is a net exporter of oil and natural gas. Significant oil reserves were discovered in Libya in 1959.

Libya has the largest proven oil reserves in Africa, at 48 billion barrels in 2022, and the country's economy is heavily dependent on exploitation of this resource. However, using funds generated from oil exports, the government of Libya, dominated for more than four decades by Muammar al-Qaddafi, who died in 2011, lent monetary support to international paramilitary organizations. These activities led to sanctions, most notably from the United Nations (UN) and the United States in 1996 for Libya’s involvement in the bombing of a civilian aircraft over Lockerbie, Scotland. These sanctions led to a decrease in foreign direct investment in Libya’s energy sector and limited its ability to export energy to certain countries. The UN lifted sanctions in 1999, but the United States continued to place sanctions on Libya until 2006. After the suspension of sanctions, international oil companies increased their foreign direct investment in hydrocarbon production and exploration in Libya. Since the 2011 revolution that overthrew Qaddafi, Libya has been wracked by political instability and civil war, causing crude oil production to drop precipitously.

Oil and Natural Gas Resources

Libya has substantial oil and natural gas resources and is a member of the Organization of Petroleum Exporting Countries (OPEC). The Libyan economy is heavily dependent on hydrocarbon exports, which in 2023, made up 95 percent of the country's exports and government revenue. Additionally, earnings from the oil and gas sectors comprise 60 percent of gross domestic product (GDP). Libyan oil production peaked at over 3 million barrels per day in the late 1960s. In 2022, oil production was 1.245 million barrels per day. All the country's electricity was generated by fossil fuels. Libya has the largest oil reserves in Africa, estimated in 2022 to be about 48.4 billion barrels, as well as approximately 1.505 trillion cubic feet of natural gas reserves. Most of Libya’s proven oil reserves are found in the Sirte Basin. In 2022, crude oil production was around 1.245 million barrels per day—down from around 1.8 million barrels per day in 2010. Similarly, natural gas production was about 11.832 billion cubic feet in 2022, compared to over 1 trillion cubic feet in 2009.

Libya has been a net exporter of oil and natural gas. According to the International Energy Agency, around 85 percent of Libyan oil exports are sold to European countries. Libya’s consumption of refined petroleum products was estimated to be approximately 255,000 barrels per day in 2014. Libya’s exports of crude oil were about 834,000 barrels per day in 2013, down from 1.5 million barrels per day in 2010. In 2022, Libya consumed about 9.212 billion cubic feet of natural gas and exported 2.62 billion cubic feet. The primary method of exporting natural gas is via pipeline; a small amount is exported as liquefied natural gas. In 1971, Libya became the second nation to export liquid natural gas, but due to infrastructural and technological shortcomings and the effects of international sanctions, liquid natural gas exports have been consistently low. Natural gas exports to Europe grew considerably after 2004 with the opening of the 370-mile Greenstream underwater natural gas pipeline from Libya to Sicily. The Greenstream pipeline is operated by Eni, in partnership with National Oil Company.

Future Uncertainty

Libya’s energy demand was met through a consumption mix of 72 percent by oil and 28 percent by natural gas in the first decade of the twenty-first century. All Libya's generated electricity comes from fossil fuels. In 2022, had five domestic refineries, with a combined capacity of 380,000 barrels per day (bpd). UN Resolution 883 of November 11, 1993, which banned Libya from importing refinery equipment, reduced Libya’s capacity for refining oil until sanctions were lifted in the early 2000s.

Fighting between Qaddafi and rebel forces in 2011 disrupted Libyan oil production such that it dipped below 100,000 barrels per day for a time, before rebounding to current levels. The civil war that lasted from 2014 to 2020 made the future of the oil and natural gas sector uncertain.

Libya’s capacity for nuclear power has been curbed by technical limitations as well as international opinion and policy. Libya pursued bilateral negotiations to augment its ability to construct nuclear research facilities and power plants, but the nuclear program’s progress has been mitigated by lack of oversight, technology, and foreign supplies and support.

However, Libya took important steps toward sustainable development in 2024. It entered into an initiative with the European Union, along with the United Nations Development Programme (UNDP), and the German Federal Government Through the German Corporation (GIZ), to develop renewable energy sources and adapt to climate change.

Bibliography

"Advancing Libya's Energy Transition and Climate Change." United Nations Development Programme (UNDP), 11 Mar. 2024, www.undp.org/arab-states/press-releases/advancing-libyas-energy-transition-and-climate-resilience. Accessed 4 Aug. 2024.

Hallett, Don. Petroleum Geology of Libya. Amsterdam: Elsevier Science, 2002.

"Libya." The World Factbook, Central Intelligence Agency, 30 July 2024, www.cia.gov/the-world-factbook/countries/libya/#energy. Accessed 4 Aug. 2024.