Libya joined the Organization of the Petroleum Exporting Countries (OPEC) in 1962, a year after Libya began exporting oil. Libya holds the largest amount of proved crude oil reserves in Africa, the fourth-largest amount of proved natural gas reserves on the continent, and it is an important contributor to the global supply of light, sweet (low sulfur) crude oil, which Libya mostly exports to European markets.
Libya's hydrocarbon production and exports have been substantially affected by civil unrest over the past few years. In 2011, Libya's hydrocarbon exports suffered a near-total disruption during the Libyan civil war, and the minimal and sporadic production that occurred was mostly consumed domestically. In response to the loss of Libya's oil supplies in the summer of 2011, the International Energy Agency (IEA) coordinated a release of 60 million bbls of oil from the emergency stocks of its member countries through the Libya Collective Action—the first such release since Hurricane Katrina in 2005.
Libya's oil production recovered in 2012, but it still remained lower than levels prior to the civil war. In 2013 and 2014, Libya experienced major swings in its crude oil production, falling to its lowest level since the civil war of 0.2 million bpd at the end of 2013. For almost a year, Libya's major eastern oil ports (Es Sidra, Ras Lanuf, Zueitina, and Marsa al-Hariga) were not able to export oil because of a blockade led by Ibrahim Jidran, a branch leader of the Petroleum Facilities Guard (PFG), which was hired to protect the facilities. The port blockades began in late-July 2013 and ended after deals were made to reopen the ports in April 2014 (Zueitina and Marsa al-Hariga) and June 2014 (Es Sidra and Ras Lanuf). In the western part of Libya, production at the 340 000 bpd El Sharara field and, to a lesser extent, the 100 000 bpd El Feel field has also been repeatedly shut down.
Libya's economy is heavily dependent on hydrocarbon production. According to the International Monetary Fund (IMF), oil and natural gas accounted for nearly 96% of total government revenue and 98% of export revenue in 2012. Roughly 79% of Libya's export revenue comes from crude oil exports, which brought in about US$ 4 billion per month of net revenues in 2012. The U.S. Energy Information Administration's (EIA) OPEC Revenues Fact Sheet shows that Libya's net oil export revenues totalled US$ 4 billion during the first six months of 2014 as a result of the drop in oil export volumes. During the 2011 civil war, the drop in oil and natural gas production led to an economic collapse, and real gross domestic product (GDP) declined by 62% for the year. Libya's GDP growth rebounded in 2012, reflecting the relative stability of oil production, but it contracted again by almost 14% in 2013. Projected oil production is expected to fall by another 20% in 2014.
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Adapted from a press release by David Bizley
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