Libya has the largest proven oil reserves on the African continent. However, the country’s 2011 civil war and subsequent unrest have halted production over the past few years. Though an end to the violence brought much of Libya’s oil production back online by the end of 2011, violent protests throughout 2013 stopped production and exportation yet again as many ports and oil facilities shut down. Continuing protests have kept much of the country’s production offline.1
Libya is highly dependent on its oil for funding; in recent years, oil and gas revenues have accounted for more than 96% of the government’s income.2 The primary market for Libyan oil is Europe, which imported 75% of Libya’s crude oil in 2013.3 Like its production, Libya’s oil exports halted after 2011. Though production has not picked back up because of ongoing protests in oil-producing regions, stored oil has begun to leave the country since many ports have been reopened.4
International oil companies such as BP have explored the possibility of drilling for oil in the deep waters off Libya’s coast as recently as 2010. However, BP backed out of its deepwater efforts in Libya by December 2010, citing “operational reasons.”5 But with the start of the Libyan revolution in early 2011, security concerns undoubtedly played a role in the company’s decision to withdraw.
Since the fall of former Libyan leader Moammar Gadhafi, the country has been fraught with violence, regional militias and border issues that threaten its national security. While the government can no longer maintain tight, centralized control over the country for fear of another uprising, officials have found a tool with which to incentivize revolutionaries to maintain relative peace and order: oil. With decentralized regional militias claiming and commanding various regions throughout the country, cooperation between the central government and these groups is vital to maintaining national security. To that end, the government has distributed its massive oil revenues to militia groups and regional leaders in an effort to gain their cooperation and disincentivize further harm to the government’s strategic interests. Thus energy has become a guarantor of political stability in Libya,6 and threats that endanger the government’s ability to maintain and secure oil production are major concerns for Libyan officials. Such threats include damage to the country’s massive energy infrastructure, disruption along border regions through which oil flows, and social unrest that interrupts production efforts.
In addition to the country’s ongoing unrest, new threats to Libyan oil production have cropped up, including the Islamic State. In February 2015, the Libyan National Oil Corporation said it was considering shutting down production completely, citing concerns over Islamic State militants.7
[1] “Country Analysis Brief: Libya,” U.S. Energy Information Administration (November 2014).
[2] Paul Adrian Raymond & Mohammed Haddad, “The Battle for Libya’s Oil,” Al Jazeera, Feb. 19, 2015.
[3] “Country Analysis Brief: Libya,” U.S. Energy Information Administration (November 2014).
[4] “Country Analysis Brief: Libya,” U.S. Energy Information Administration (November 2014).
[5] “BP Delays Libya Deep Water Plan,” Financial Times, Dec. 9, 2010.
[6] “Libya’s Divisions in the Post-Gadhafi Era,” Stratfor, Feb. 7, 2013.
[7] Nick Cunningham, “Libya Oil Output Plunges Amid Heightened Violence,” Oil Price, Feb. 17, 2015.