A new study has pointed to lack of political stability and security as Libya's main hurdles on the road to post-conflict reconstruction and economic recovery. Though officially declared as "liberated", Libya is considered an "extreme risk" country.
Prior to the uprisings, Libya's hydrocarbon industry accounted for over 95% of export earnings and between 85% and 90% of fiscal revenues. But it was run inefficiently under Gaddafi’s rule. A mere 25% of the country is said to have been explored for hydrocarbon reserves, making post-conflict Libya an attractive proposition for international oil companies.
But indications are that NTC would renegotiate, if not annul, contracts signed with the Gaddafi regime. Oil and Finance Minister Ali Tarhouni announced on October 11 that a committee will be established to examine whether all past oil contracts are legitimate.
Reports on October 21 said that Libya's National Oil Company (NOC) had summoned Russia's Gazprom to defend its actions related to an alleged "breach of investment obligations". The "breach" relates to Gazprom's alleged failure to pay for student education.
The absence of a clear regulatory framework and stable government has however not prevented some companies from returning to Libya. It has also not deterred new companies from seeking to enter the market.
Indeed, in addition to oil companies such as Wintershall, Total and Eni, Libyan energy firm Zueitina Oil is reported to have resumed operations. Others such as Austrian oil firm OMV announced on October 18 that it is considering sending expatriate staff back to Libya. Non-oil sector companies are also being encouraged by the authorities to seek out opportunities.
The study finds little evidence to suggest that companies from countries which stood behind NATO's intervention to support the NTC against Gaddafi are receiving preferential treatment over those which did not.
This is despite NTC leaders indicating that companies from countries – such as France and the UK – which placed their political and support squarely behind the rebels at an early point of the military campaign would enjoy preferential treatment.