Oil and gas in a new Libyan era: conflict and continuity
Libya has long been an idiosyncratic political and governance context for the oil and gas industry. Since independence in 1951 the country has passed through sharply contrasting periods of politics and governance, each of which has intentionally and unintentionally shaped the industry. In the latest period, since 2011, armed conflict and insecurity – rather than governance and policy – have been the most obvious factors affecting the oil and gas sector. Fighting and insecurity have caused stoppages and disruptions in the oilfields and at export terminals, and oil production has fallen from an average of 1.6m b/d just before 2011, to lows of as little as 200,000 b/d and an average of barely 500,000 b/d in 2016. New investment in Libyan hydrocarbons has largely been halted.
Understanding exactly how and why conflict and insecurity have affected oil and gas is instructive for making projections for the coming years. Also important, however, is to understand the significant continuities in the political economy of oil in Libya, including dynamics surrounding the National Oil Corporation (NOC). This paper will explore the changes and continuities, how conflict, insecurity and current politics affect the industry, and the implications and outlook for the future.