For example, Libya opened up its programs to develop weapons of mass destruction to international scrutiny and renounced terrorism as a political tool (Libya, 2010). Moreover, the country's political leadership has been equally forthcoming in its efforts to normalize their relations with Western nations since 2003 (Libya, 2010). More recently, Libya has been removed from the U.S. State Department's list of states that sponsor terrorism in 2006 and in 2008, Libya joined the United Nations as a nonpermanent member on the UN Security Council during the 2008-2009 term (Libya, 2010).
Other signs that clearly point to increasing normalization and trade between Libya and the West were seen in August 2008 when it signed a bilateral comprehensive claims settlement agreement with the United States and Libya has paid $1.5 billion to be distributed to national claimants in the United States for past injuries (Libya, 2010). Finally, as a clear indication that relations between Libya and the West in general and the United States in particular had normalized was the exchange of ambassadors in 2009, the first such diplomatic representation in each other's country since 1973 (Libya, 2010).
The importance of the study also relates to the fact that the economy of Libya is overwhelmingly reliant on revenues from the oil sector, account for fully 95% of the country's export earnings, as well as representing a quarter of Libya's GDP and 60% of its public sector wages (Libya, 2010). In fact, Libya is Africa's largest oil producer (Williams, 2009). According to a recent report from Petroleum Intelligence Weekly (2010), "Tracking down new oil and gas volumes likely to emerge from Libya and Algeria in the near future is tricky business: Big discoveries have been few in both countries, while in Libya, development work has advanced slowly under contracts renegotiated in 2007-09" (New flows hard to find in Libya, Algeria, 2010, para. 2). Despite these constraints, the oil industry in Libya is poised to take advantage of investments in exploration and development and has the natural resources to provide new production levels in the future. In this regard, analysts at Libya Onlne report, "Signs of life lurk, however. The U.S. partners at Libya's Waha concession, ConocoPhillips, Marathon and Hess, expect their Faregh Phase 2 project to yield 180 million cubic feet per day of gas for local use starting early next year, plus 15,000 barrels per day of liquids. Overall Waha oil output is set to rise to 400,000 b/d in 2011 after lingering for years at just over 350,000 b/d" (New flows hard to find in Libya, Algeria, 2010, para. 3). According to a recent press release from Al-Waha, "Faregh oil and gas field has recently become operational. This newest oil field is situated about 60 km to the south west of Gialo oil field. The Faregh field was first discovered in 1962 but because of the complex geological nature of the field and due to economic reasons, the field was left undeveloped by the company at that time. On the First of September 2003, completion of the first phase was celebrated. Faregh field development of phase II has already started. Basic and detailed engineering are in progress" (Recent achievements, 2010, para. 1).
There is also a glaring need for improved supply chain management practices throughout the country's oil and gas industry to help maximize the efficiency of these operations in order to provide a return on investment that can be used to help improve the quality of life for the average Libyan citizen. In the past, the majority of the revenues realized through Libya's oil and gas industry have been used to bolster the socialist government that was in place, allowing it to prosecute a campaign of terrorism that made it an international pariah. Over the past few years, though, the Libyan political leadership has made substantive progress in reversing these trends in an effort to rejoin the international community and regain access to the commercial trade that goes with it (Libya, 2010).
To help achieve its political and social reforms, the Libyan government has announced an ambitious program to almost double the country's oil production to 3 million barrels a day by 2012; however, the National Oil Corporation of Libya recently indicated that this target might have to be postponed to as late as 2017 unless and until improvements in technology and logistics can be effected (Libya, 2010). Other analysts also cite the Libyan government's ambitious oil production goals as being part of its overall efforts to attract increased foreign direct investment (FDI). For instance,...
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