Oil is the economic lifeblood of Libya . The country is the second largest oil producer in Africa after Nigeria . Revenues from the sector make up nearly all export earnings, 98 per cent of currency earnings and contribute over 25 per cent of GDP.

Libya produces high quality low-sulphur or 'sweet' crude at low cost, as litte as US$1per barrel at some fields.

At present, 12 oilfields are currently exploited with proven reserves of over one billion barrels of oil. Another two, yet undeveloped, fields are estimated to hold between 500 million to one billion barrels. There is much untapped capacity as only 25 per cent of potential sites are covered by agreements. Libya has also produced and exported liquefied natural gas since the early 1970s. Marsa al Burayqah and the Surt area are major centers for natural gas production and processing. In 1999 Libya produced six billion cubic meters of natural gas.

Yet the hydrocarbons industry is the most hard-pressed and the most in need of renewed vigour. The sector has still to shrug off the full effects of the dramatic nationalization program. Sanctions, which specifically targeted all aspects of this strategic industry, cut deep. The infrastructure includes nearly 7,000 kilometers of oil and pipelines, refineries and processing plants, all of which need extensive maintenance and renewal.

As relations with libya are normalized the opportunities for investment in every aspect of the sector, from vehicles to drilling and modern engineering technology, will be greatly enhanced and inward investment, already visibly growing, is expected to surge .