Unrest in Libya has made investors wary of the nation’s chances to sustain and grow its oil production market, leaving the future of Libyan oil up in the air, according to Consumer Energy Report.
Talks this week involving Libyan leaders and oil refining corporations that will see contracts worth about $50 billion given out in order to grow that country’s fossil fuel sector are set to begin with a whimper, as interest in Libya’s oil continues to decline among wary investors.
More than a year following the ouster of Muammar Gaddafi as leader of Libya, oil production has returned to pre-civil war levels, but a variety of factors are combining to keep investors away from the OPEC nation, a fact that is only contributing to the continued unrest of the country’s people.
Exemplified by the many protests and strikes that plague oil extraction and refineries around the region, the military air that remains in Libya can be found in the attitudes of many of its people, most of whom are still recovering from their own personal losses during the country’s civil war in 2011. (Read More: How National Security Planners Should View America’s Energy Boom)
All of that unrest has translated into investors who are very reluctant to bet their funds on the nation’s chances at sustaining and growing its oil production market, leaving the future of Libya’s oil up in the air.
“The political instability and security problems make it less attractive for the international oil companies and for the traders as well,” said Charles Gurdon, managing director of political risk consulting group Menas Associates.(Read More: Alberta Oil Sands Expected to Draw $364 Billion in New Investment)
Adding to the obvious instability is the fact that Libya’s sweet, high-quality crude is falling in popularity among the world’s refineries, with several European plants that focused on refining sweet crude closing down over the past year as the market looks towards the cleaner sour crude produced in other parts of the world.
With firms from France, Italy, Spain, the United States, and other countries all vying for a piece of Libyan oil reserves on the cheap, this week’s talks could prove to be entirely unsuccessful in plotting the course of a currently directionless market in a part of the world that cannot afford to lose interest in its most commercially successful export.