Oil has played a major role in the rise and fall of many MENA states economy, it is the one essential “goodie” that keeps great powers like the United States politically interested in the region. Libya in the 1950’s and 1960’s was in great shape economically wise, Italy, United States, international and foreign agencies were heavily invested in Libya’s oil industry. The first oil pipeline, from B’ir Zaltan to the coast, was opened in 1961, essentially more oil fields were subsequently discovered opening the doors for a greater impact in its economy. Libya was one of the poorest but  stable countries in the MENA region at the time, but after the discovery of oil fields, Libya began deteriorating from the inside out. In 1969 through the coup d’état, Gaddafi became the leader of Libya and soon nationalized all oil and gas companies through NOC (National Oil Corporation). The efforts made to create a state led economy failed drastically in 1980’s onward, after oil prices began falling and sanctions began pouring in. After many years on state sponsor terrorist list, the United States officially removed Libya from the list and normalized ties in 2006, paving the way for a new era for its oil and gas industry; however this accomplishment did not last long.

The rise of the Arab Spring in 2011 and the fall of Gaddafi created a new opportunity for Libya to pursue economic and social reforms, but the “manner in which the revolution came about had serious economic implications and created numerous challenges”. Security is the main issue involving Libya’s economic succes.Oil is Libya’s main source of revenue, and securing its oil fields was/is a great dilemma. As a result to the civil war, the economy contracted 41.8% in 2011 with  95% of its revenue coming from exports of oil materials. Libya is making tremendous efforts to eliminate all threats to its government and economic sector, but the opposition is much stronger than projected. Many of the essential oil fields in Libya are under control of the opposition’s militia, slowing the efforts to stabilize Libya’s economy and progress. Giving the succesful beginning of Libya’s oil industry in the 1950’s and 1960’s, the international community should recognize Libya’s endeavor and provide greater assistant in securing its main resource; oil. Now is the best time for investing in Libya’s future (energy and economy sector), while there is no major force striving for a dictatorship.

The situation in Libya has become even more complicated as vital oil infrastructure has been attacked or caught in cross fire, leading to severe damage that would take months, or maybe years, to repair. During the 2011 civil war, oil infrastructure, for the most part, was not damaged or targeted. However, in December 2014, the eastern Es Sidra export terminal, Libya’s largest export terminal, caught on fire after it was hit by a rocket. Many of its storage tanks were severely damaged, significantly lowering its export capacity. In addition, groups claiming to be affiliated with the Islamic State of Iraq and the Levant (ISIL) have severely damaged pipelines and vital equipment at oil fields

 

SOURCES:

Click to access Libya%20Full%20PDF%20Country%20Note.pdf

http://countrystudies.us/libya/58.htm

http://www.africaneconomicoutlook.org/en/country-notes/north-africa/libya/

https://www.eia.gov/beta/international/analysis.cfm?iso=LBY

http://www.encyclopedia.com/topic/Libya.aspx