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Oil and Gas The oil industry is of vital importance to the Libyan economy, and
is supervised by the National Oil Corporation (NOC), which was established
in 1968 with a brief to manage upstream and down-stream affairs. Partial
nationalization in 1973 has led NOC to participate in many production-sharing
agreements with foreign firms, and the withdrawal of US companies from
Libya has Lasmo PLC, a UK firm within a Libyan consortium, has continued with a profitable venture in Libya. Lasmo announced the discovery of a new field in October 1997, and will start drilling seven production wells in mid-1999. The Elephant field, situated in the Murzuk Basin in the south-west, is estimated to contain around 500 m barrels of crude oil (block NC-174): the largest find in Libya in 13 years. Spain's Repsol recently announced another major discovery in the Basin, with potential reserves of between 100- 200 m barrels. Production tests gave a flow of 2,500 barrels a day (b/d) of high-quality light crude, and commercial production may start as early as April. The International Energy Agency (IEA) forecasts that Libya's oil production capacity will rise by 18 per cent by the year 2000, while future development of the country's Bouri field, the largest known offshore structure in the Mediterranean, could bolster production levels even further. In January 1999, France's Elf Aquitane announced another offshore discovery near the Tunisian border, with reserves estimated at 100- I 50 m barrels. Faced with a maturing reserve base, the challenge facing the Libyans will be to maintain production at the established fields while bringing new fields on-line. Even with trade sanctions in place, Libya exports some 1.4 m barrels
a day (b/d) of crude oil and an estimated 200,000 b/d of petroleum products.
Oil is transported to Mediterranean terminals by an extensive network
of pipelines not only in Libya. Libya and Egypt began negotiations in
1997 to build a 386-mile pipeline along the North African coast, between
Tobruk and Alexandria. This is part of a joint energy co-operation agreement
under which the Libyan crude will be refined at Alexandria, while some
300-350 m cu ft per day of gas will be exported from Egypt to Libya.
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Natural Gas Natural gas production is also a priority for the Libyans, as it will enable more oil to be exported and will also, in itself, prove a ready commodity for export. Indeed, while Libya's natural gas reserves of 1.31 trillion cubic metres (tcm) is in itself impressive, some Libyan commentators put the actual reserves much higher. New, large-scale discoveries are being made, and these come at a good time for the Libyans. Natural gas consumption has been rising at an estimated 10 per cent annually since 1990 and, as well as using gas in oil production, it is increasingly being used in the petro- chemical and electricity sectors as an alternative fuel source.
Gas also forms part of the government's development plans, although exports of natural gas have been failing in recent years, mainly due to poor transportation links. This is likely to be corrected and exports are projected to rise again when an ambitious $3 bn initiative to tap into offshore fields and link the reserves of Libya and Italy via an undersea pipeline, comes to fruition in the next century. Agriculture and Water Resources Historically, the agriculture sector has produced around 5 per cent of GDP, although this proportion is likely to change as a result of the Great Man- made River project (see below). It goes without saying that effective, large-scale agricultural production will always be hard in a country where only two areas (northern Tripoli and northern Benghazi, according to the FAO), have an average yearly rainfall which is adequate to sustain rainfed agriculture. |
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