Beirut (APD) - The Libyan Foreign Investment Board approved the creation of a $3 billion oil refinery and it is considering to approve the creation of another one by a consortium of companies, Libya's minister of economy and trade Al Tayeb Al Safi announced on Thursday.
Safi did not disclose the identity of these companies or provide any other details about the projects in his announcement as reported by the UAE-based Al Bayan daily.
Libya intends to upgrade its entire refining system, in a bid to boost the output of gasoline and other light products such as jet fuel. Oil refining in Libya suffered serious damages from years of UN sanctions, especially a UN resolution that banned Libya from importing equipment for its refineries.
According to the U.S. government's Energy Information Administration, likely projects comprise a new 20,000 bpd hydro skimming refinery in Sebha, which would process crude from the nearby Murzuq field in order to meet local demand in southwestern Libya and a 200,000 bpd export refinery in Misurata.
Libya has five domestic refineries, with a combined nameplate capacity of about 380,000 bpd. The output of these refineries is significantly higher than the volume of domestic oil consumption estimated at 258,000 bpd in 2005.
However, the two main refineries, Ras Lanuf and Az Zawiya with a combined capacity of 340,000 bpd, are more than 20 years old.
The country is seeking foreign investment to refurbish its oil sector and in order to develop other economic sectors.
In the next few days new economic decisions would be issued to encourage foreign investments in Libya in different sectors. Among other things, these decisions aim to lift restrictions on foreign banks and facilitate credit operations in the country, Safi said.
"We will give priority to opening new banks in Libya as joint-ventures between Libya and other countries," Safi affirmed and added that Libya is open for foreign investments which would contribute to technology transfers and provide jobs for the Libyan workforce.
Foreign investments in Libya are mainly in the oil and the real estate sectors.
The daily quoted government officials as saying that the size of current foreign investments in Libya which ranges from $12 billion to $14 billion per year is not up to the ambitions of the Libyan government.
Libya's oil reserves are estimated at 39 billion barrels at the beginning of 2006. Its annual oil production is estimated at 1.643 million bpd while its oil production forecasts for 2010 are at 2 million bpd. [TS]
By Shikrallah Nakhoul, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
