The change in landscape initiated by the Arab Spring has provided several opportunities and challenges for International Oil Companies (IOCs) that operate in North Africa. OMV Senior Vice President, Dr David Latin recently spoke to The Energy Exchange outlining these challenges as well as the steps taken to build a sustainable oil and gas industry in the North African region.
Prior to the war, oil in Libya accounted for 70 per cent of the country’s GDP, 95 per cent of exports and nearly 90 per cent of government revenue, estimates the International Monetary Fund, placing significant stress on OMV and other IOCs.
“Our industry provides significant value to the countries we operate in, in terms of jobs, revenues, infrastructure and community relation work,” said Dr. Latin.
With the political environment still evolving as newly appointed officials take office, Dr. Latin states that rapid decision making is one of the key challenges faced by OMV in the midst of all the ambiguity. In addition, security has to be managed carefully particularly in Libya and in Tunisia.
Libya, the world’s ninth largest oil producing country with more than 47 billion barrels of oil, holds the largest oil reserve in Africa. This oil rich nation is ideal for IOCs to thrive however the current lack of capability building is a challenge as it constrains growth as well as the implementation of multi-billion US Dollar projects.
Dr. Latin said: “We want to build local capability and to utilise local content and contracts wherever we are able, but we also want to be able to execute activities to very high standards in a relatively short period of time.”
Estimated unemployment rates in Libya and Tunisia at the end of 2011 are reported to be around 30 per cent and 18 per cent respectively.
