Overview

Libya has been in a state of political turmoil since the revolution that toppled Muammar Gaddafi. The various militias that fought the revolution have remained armed and loyal to their own commanders and territories. This has made it difficult for the General National Congress to exert its authority and rebuild the nation.

The lack of government control has had a drastic effect on the economy. The production and export of hydrocarbons accounts for nearly 96% of total government revenue, but labour unrest saw strikes and protests break out at the country’s oilfields and ports in 2012, halting exports and crippling the economy.

The fledgling government lacks both control over the military and a reliable source of income, which has put it in a weak position. Renegade General Khalifa Haftar’s attempt to seize parliament in 2014 shows how vulnerable it is to a coup.

The gas industry, like the rest of the hydrocarbon sector, has been greatly affected by the revolution and disorder that has followed. The country’s ageing LNG plant at Marsa el-Bregha was damaged during the civil war, stopping all exports from it.

Shell planned to update and expand the plant before the revolution. However, a disappointing exploration venture and the deteriorating security situation forced the company to leave the country in 2011. Resuming LNG exports will require a large capital investment and the expertise best offered by an international oil company. Without political stability this will not happen and the LNG plant will remain offline.

Gas volumes delivered through the GreenStream pipeline have been disrupted by the civil war and unrest among oil workers and Libya’s minorities. Italy has been unable to rely on the pipeline as a stable source of gas imports since 2011.

Page updated: 26/08/2014