- September 7, 2016
Libya, formally the State of Libya, is a country in the Maghreb region of North Africa surrounded by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west. The three traditional parts of the country are Tripolitania, Fezzan and Cyrenaica. Libya is positioned in North Africa on the Mediterranean Sea. With an area of almost 1.8 million square kilometres (700,000 sq mi), Libya is the 17th largest country in the world. Libya is a member of the African Union (AU), African Economic Community (AEC), Council of Arab Economic Unity (CAEU), and Common Market for Eastern and Southern Africa (COMESA).
A Brief Overview
Libya is a member of the Organization of the Petroleum Exporting Countries, the holder of Africa’s largest proved oil reserves, and an important contributor to the global supply of light, sweet crude oil.
Libya is supposed to hold large amounts of unexploited hydrocarbon resources as it shares similar hydrocarbon-bearing geological structures with its neighboring countries although most of the country remains unexplored.
The country’s National Oil Corporation (NOC) has highlighted the requisite to apply boosted oil recovery techniques to increase crude oil production at maturing oil fields. Before the 2011 civil war, the NOC claimed that capacity additions of around 775,000 bbl/d were possible from existing oil fields.
Libya’s oil production was disrupted for most of 2011 because of the civil war, but it began to recover relatively rapidly following the cessation of most hostilities by the autumn of that year. The country’s oil sector was crippled again in mid-2013 as protests led to the closure of loading ports, oil fields, pipelines, and a sharp deterioration of the security environment at oil installations.
Libya usually exports most of its crude oil to European countries, with Italy being the leading recipient. The United States restarted importing crude oil from Libya in 2004 after sanctions were removed, though the amount it typically imports is small.
As with its oil sector, Libya’s natural gas industry recuperated in 2012, but production still remained below pre-war levels. Libya’s rank as a producer and reserve holder is less significant for natural gas than it is for oil. Most of its natural gas production is disseminated to Italy via pipeline.
In 1971, Libya was the third country in the world, after Algeria and the United States (Alaska), to initiate exporting liquefied natural gas (LNG). Typically, the country exports a small amount of LNG to Spain. However, the LNG plant was smashed during the 2011 civil war, and Libya has not exported LNG since early 2011.
Financial Services: There is a growing requirement of quality financial services in Liberia. A strong financial system aids as the basis for growing much of the domestically driven economy and also providing a bridge for foreign investors to enter the country. At present, the largest growth sectors of the financial service industry include commercial banking, investment banking, leasing, and insurance. These fields deliver high growth margins in direct relationship to the industries that they service.
Real Estate & Construction: The real estate sector is budding due to the requirement of increased security and the accessibility of mortgages and construction finance credit. Demand for real estate construction has so far been driven by the presence of organizations such as UNMIL, the World Bank, IMF, donor representatives, NGOs, and business interests.
Infrastructure: In Liberia, most of the infrastructure was devastated by the conflict, or left to fall apart due to insufficient upkeep capacity. Ports, airports, bridges, roads, power-plants, fixed communications, mobile networks, power-plants, sanitation amenities, and electricity and water distribution networks are all either in the commencement stages of rehabilitation, or require major new initiatives.
Agribusiness: The government is dedicated to heartening the rapid growth of the agricultural industry. Rising food and commodity prices intensify the craving to increase domestic agricultural production. The stimulation of this sector would be instrumental in providing jobs, returning people to the country, providing food security, and turning Liberia from a net food importer into an exporter.
Mining: The country has widespread assets of iron ore, gold, diamonds, and other minerals that are proving to be tremendously valuable on the international commodity markets. Revenues from iron ore accounted for nearly half of the country’s earnings prior to the civil war. All iron ore mining operations were closed during the period of conflict and the needed support infrastructure was eroded, infrastructure which is now being replaced.
Other concession arrangements are being exchanged with several mining companies, the largest being the Western Cluster, which is also laden with high-grade iron ore. After awarding the Western Cluster to a South African company, the government has hired Deloitte & Touche to complete a due diligence exercise on all five bidders prior to ratification of the contract.
Oil Sector: The Gulf of Guinea, extending from Liberia to Gabon, is a known depository of oil reserves. Indication of oil was exposed off Liberia’s shores decades ago, but investment was never forthcoming due to the political instability that plagued the country since 1980.
Prospects in relation to the oil-sector are extensive, stretching from financial services, shipping, housing and office space, and a collection of secondary support services. International investment into this area will range well beyond just the oil exploration and extraction itself, but should incorporate many sides of the Liberian economy.
Electricity: Electricity generation has more than doubled from 2000 to 2010. Mounting power demand, which was better than gains in installed generation capacity, have led to electricity shortfalls.
Libya’s oil sector has also been touched by power supply issues, which has negotiated production at some of the country’s largest oil fields.
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