Posted on 10/24/2011 7:31:01 AM PDT by bananaman22
Libyan Colonel Gaddafi’s 42 year brutal reign is over, but the future looks murky ahead for a country primarily known for exporting oil and terrorism.
One thing is for certain – international oil companies will be packing out flights to Tripoli to cut deals for a piece of the action.
Libya remains the wild card, with only 25 percent of the country’s oil potential territory explored. Whatever the demerits of the Gaddafi regime, it kept tight rein over its oil industry, and that, combined with international sanctions for its terrorist proclivities, largely stymied development of the country’s resources, much in the way that the development of Iran’s petrochemical sector has been largely devoid of foreign capital. After all, they did not call the 1996 U.S. legislation “the Iran-Libya Sanctions Act” (ILSA) for nothing. In September 2006 ILSA was renamed the Iran Sanctions Act (ISA), as Gaddafi was behaving himself more, but the damage to the country’s energy infrastructure was by then deep and systemic.
The Libyan economy depends primarily upon revenues from the oil sector, which contribute about 95 percent of export earnings, 25 percent of GDP, and 80 percent of government revenue. All of this is up for grabs now.
Prior to the outbreak of conflict in February, Libya was exporting about 1.3-1.4 million barrels per day from production estimated at roughly 1.79 million barrels per day of high-quality, light crude, of which approximately a mere 280,000 barrels per day were indigenously consumed. But current production is the proverbial mere drop in the bucket. Libya has the largest proven oil reserves in Africa with 42 billion barrels of oil and over 1.3 trillion cubic meters of natural gas, according to conservative estimates.
Now that the fighting is apparently over, the issue of Libya’s oil production will swiftly move front and center in international interests.
On 19 October International Energy Agency official David Fyfe said in Paris that despite IEA official estimates that Libya could be pumping around 1 million barrels a day by the end of 2012, a fraction of its 1.79 million barrels per day output pre-military action, all estimates of Libya’s future output are a "shot in the dark" before adding Full article at: What Next for Libya?
The West may get some of Libya’s oil in the beginning, but it won’t be long before the Islamists there figure out it is the leverage and resource they need to screw the West and oppress their own people.
Western oil developers might want to have a quick way out of Libya when the Brotherhood starts the kidnapping and beheading game.
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