The market for oil and gas upstream in Libya is expected to register a CAGR of more than 0.27% during the forecast period of 2020 – 2025. Factors, such as upcoming oil and gas exploration projects, along with increased production of oil and gas, are expected to boost the demand in the Libya oil and gas upstream market during the forecast period. However, the civil war in the country has severely impacted the growth in the sector, and it is likely to have a negative impact on the entire oil and gas industry in the coming years.
- Most of the economically viable oil fields in the country are situated inland. Therefore, it is evident that the onshore segment dominated the market in 2019.
- The growth in the oil and gas upstream sector has been severely impeded due to the ongoing civil war in the country. However, in 2019, as most of the country has come under the Libya National Army, the prospects of the civil war ending in the forecast period have increased. This, in turn, is expected to create an opportunity for companies in the market.
- An increase in oil and gas production in the country is expected to drive the market in the forecast period. The country has vast reservoirs of oil and gas that may be used to boost the growth in the sector.
Key Market Trends
Onshore to Dominate the Market
- Libya held an estimated 48.4 thousand million barrels of proved crude oil reserves at the beginning of 2018. Most of the country's proved oil reserves are held onshore. There are also some offshore oil fields off the coast of Libya, near the capital Tripoli.
- One of the most essential Libya's crude oil blends is the Amna, with API gravity of 37.0, a high quality and low sulfur 0.17% crude oil. The oil grade is of excellent quality and requires a low level of refining maintenance and equipment.
- The oil production increased in the country, by 1.6%, from 32.2 million metric ton in 2017 to 32.7 million metric ton in 2018. The oil consumption in the country decreased, by 6.4%, year-on-year, from 39.2 million metric ton of oil equivalent (mtoe), in 2017 to 36.7 mtoe in 2018. The increase in the oil production in the country is expected to provide some growth in the sector.
- Hence, onshore oil and gas fields are expected to dominate the market due to the location of the oil and gas reservoir in the country.
Increase in Oil and Gas Production to Drive the Market
- As the war progresses, it is expected that the production may remain volatile, in the short term, because of the belligerent factions vying for the control of the oil fields. The oilfields may also get damaged in the process. However, peace between the belligerents may lead to a massive increase in oil and gas production in the country.
- Libya held an estimated 1.4 trillion cubic meters of proved natural gas reserves at the beginning of 2018. Most of the country's proved gas reserves are held onshore. Oil extraction is considerably more profitable due to its higher market price relative to the dry natural gas price.
- Production of natural gas increased in the country, by 2.2%, from 8.2 million metric ton of oil equivalent in 2017 to 8.4 million metric ton of oil equivalent, in 2018. The value of petroleum exports is approximately USD 17,141 million. The increase in the production of natural gas positively affects the upstream sector.
- In addition to this, the National Oil Corporation stated that it is planning to increase the country's oil production from the existing fields to over 2 million bpd by 2023. This, in turn, is expected to boost the market over the forecast period.
The Libyan oil and gas upstream market is moderately consolidated. The major companies include BP PLC, Eni SpA, National Oil Corporation, PJSC Gazprom, and Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) SA.
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