Libya Case Analysis

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1) Expropriation of assets and political instability:

Since 2011, Libya has experienced a significant political instability.
Fundamentally political risk is defined as the risk of losing money and assets, as a result of unstable governments or more than that, when the country has two governments with both claiming legitimacy, and uncontrollable the spreading of weapons throughout the whole country .
These risks include weakness of governments in controlling natural resources and the expropriation of foreign investors' assets.
As a result of the weapon chaos in Libya, many kidnapping cases have been happening for foreign workers in oil fields and international oil companies, which led these companies to leave Libya and some of them stop contracts
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Moreover, the current investment law guarantees the nationalization and expropriation.

2) Corruption:

Corruption is another significant risk factor should be taken into the accounts of any energy projects especially when it’s originated in an unstable political environment such as Libya.
Corruption penetrates every sector of Libya’s society and organisations, including the government, public and private business sector, since Libya ranked number 161 from 167 countries according to Transparency International in its global Corruption Perceptions Index (CPI).
The corruption is differentiated into three main categories, which are the bribes, extortion, patronage, nepotism, and employee fraud.
To fight pervasive corruption and to promote an environment of transparency in different Libyan sectors, it requires a strong political desire from politicians and Libyan civil society organizations.

3) High administrative burden-bureaucracy (cost and
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Although Libya is depending on petroleum industry in its economy as it represents 95% of exports and 70% of GDP and it relies on foreign oil companies. Nevertheless, Libya has a position which attracting oil companies for the Libyan high quality crude oil and geographic location to Europe.

The five attributes of opportunity:

1) Access to large petroleum (or other energy) resources and reserves.

Libya is the largest oil reserves in Africa and the tenth largest in the world with 48.4 Billion Barrels of crude oil as of 2015. And it’s said that it has more reserves than known as it remains largely unexplored because of the past economic sanctions during the eighties and the nineties, also, to the lake of advanced technology and to the harsh fiscal terms imposed by Libya on foreign oil companies. Moreover, recently Libya is suffering from political instability which reduced any expected development in the oil sector.
Many of potential areas located either in low wells density sites or in wide and deep areas, mostly basin centres.
These extensive undiscovered resources could be accessed if geophysical knowledge and modern technologies were used effectively and successfully.

2) Low finding and development

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