Libya - Energy and power



In 1955, following the discovery of oil in Algeria, oil exploration began in Libya. Instead of creating an exclusive countrywide concession, the law divided all Libyan territory into lots: British, French, and US companies were granted concessions, beginning in November 1955. With the discovery of the Zaltan field by Esso interests in 1959, a new era in the economy of Libya opened. A pipeline was laid from Bi'r Zaltan to the coast at Port Brega and was opened in September 1961. Further discoveries led to the opening of additional oil ports. Among the main oil-producing fields are those at Gialo, Amal, Waha, Raguba, and Sarir.

In April 1968, the government established the Libyan General Petroleum Corp. (LIPETCO), whose functions included the negotiation and supervision of oil concession agreements; LIPETCO negotiated four agreements during the next 2 years. In 1969, the Revolutionary Command Council (RCC) became the executive power in Libya, and by a decree of 5 March 1970, the RCC replaced LIPETCO with the Libyan National Oil Corp. (NOC), which was to oversee all phases of the oil industry. In 1971, all distributing companies were merged into the Brega Petroleum Marketing Co., which was to market, transport, and distribute oil within Libya. After the creation of NOC, an entire reorganization of the oil industry took place, marked by an increasing intervention of the Libyan government.

By September 1970, agreements with the exploiting companies were reached, giving the Libyans a price for their oil similar to that paid in Middle Eastern countries. During 1971, the government worked for new participation agreements with firms owned by Italian, US, French, German, Spanish, British, and Dutch nationals. When some of the companies refused to reduce their share to 49%, the British Petroleum (BP) affiliate was nationalized, becoming the Arab Gulf Exploration Co. In 1973, the remaining foreign oil companies had 51% of their assets nationalized; those not agreeing were taken over completely and received compensation in 1977. As of 2002, the NOC had an overall share of more than 70% in the oil industry.

Production fell after 1970, at first because of conservation and political decisions, and later because of falling demand for Libya's high-quality (but also high-cost) oil. From the 1970 peak of 157.4 million tons, production fell to 75.2 million tons by 1974. It rebounded to 99.6 million tons in 1979, but because of reduced world demand, production was only 47.9 million tons in 1987. The 2001 output was 1.43 million barrels per day. Crude petroleum reserves were estimated at 29.5 billion tons in early 2002. Earnings from oil fell from a peak of $22.53 billion in 1980 to only $4.8 billion in 1986, before climbing back to about $8 billion in 1995.

In April 1992 the UN imposed economic sanctions against Libya for failing to extradite two men suspected in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland. The United States imposed its own sanctions, including the Iran-Libya Sanctions Act of 1996. These sanctions hampered Libya's ability to increase its oil production by causing delays in field development and oil recovery projects. In 1999 Libya turned over the two suspects, and the UN suspended its sanctions, although the US sanctions remained in place.

Reserves of natural gas were estimated at 1.3 trillion cu m (46 trillion cu ft) in early 2002. Output increased from 465 million cu m (16 billion cu ft) in 1971 to a peak of 23.470 billion cu m (828.5 billion cu ft) in 1979. Production was 5.9 billion cu m (208 billion cu ft) in 2000. Natural gas facilities in Libya include three plants at Intisar, two at Marsa al-Brega, and one at Zueitina. Natural gas consumption in Libya has been rising by 10% per year, as it is used for injection into oil fields and as fuel by the petrochemical and electric power sectors.

Power production is a government enterprise. Total electric power generation in 2000 was 19,500 million kWh, compared with 256.6 million kWh in 1968; of this total, 100% was from fossil fuels. Installed capacity in 2001 was 4,600,000 kW. Consumption of electricity in 2000 was 18 billion kWh.

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