Libyan manufacturing industries developed significantly during the 1960s and 1970s, but fell far behind the petroleum sector of the economy in the 1980s. Non-oil manufacturing and construction sectors accounted for about 20% of GDP in 2002.
Libya is Africa's largest oil producer. Although oil exploration has been ongoing for half a century, Libya's oil and gas potential is vast and the country remains largely underexplored. The country's proven oil reserves are 29.5 billion barrels and production is 1.4 million barrels per day. Among the many industries utilizing petroleum products is a natural gas liquefaction plant which went into operation in 1971 at Marsa al-Brega. There are three refineries with a total capacity of 348,000 barrels per day. All the refineries are in need of updating, which Libya plans to do, in addition to building new refineries. Libya is a direct producer of refined products in Italy, France, Germany, Spain, and Switzerland. The refining sector was adversely affected by the UN embargo; several projects for expanding domestic refining were delayed. Since UN sanctions were suspended in 1999, foreign oil companies have shown a keen interest in investing in the exploration and production of oil in Libya.
The petrochemicals industry is centered at the Marsa al-Brega plant, which produces methanol, ammonia, and urea. Despite the fact that the plant operates at only 35% of capacity, its production of urea and ammonia far exceeds domestic demand. A major plant producing ethylene, propylene, and butene was opened at Ras Lanuf in 1987. A second phase of the Ras Lanuf complex was to produce benzene, butadiene, methyl tertiary butyl ether (MTBE), and butane-1, but as of 2000, it was not complete. The Abu Kammash petrochemical complex produces ethylene dichloride (EDC), polyvinyl chloride (PVC), and vinyl chloride monomer (VCM). The iron and steel complex at Misratah began operations in 1990. Large natural gas reserves were underdeveloped in 2002, but renewed foreign interest may stimulate production, and a pipeline network planned by 2006 may encourage investment.
Libya's other manufacturing industries are small, lightly capitalized, and devoted primarily to the processing of local agricultural products (tanning, canning fruits and vegetables, milling flour, and processing olive oil), and to textiles, building materials, and basic consumer items. Handicraft products include carpets and rugs, silver jewelry, textiles, glassware, and leather goods.