libya oil


Oil accounts for 80 per cent of Libya's GDP and 99 per cent of government revenues. The systematic mismanagement of this asset has effectively denied billions of dollars to its people, who are currently enduring a long and bloody civil war. Read more

Colonel Gaddafi’s stranglehold on Libya’s oil sector played a large role in keeping him in power for 42 years, and was facilitated by the collusion of foreign companies and banks. The Gaddafi family had significant personal control over the state funds invested in Libya’s sovereign wealth fund, the Libyan Investment Authority (LIA). In May 2011, Global Witness leaked documents detailing how $65 billion of LIA money was held at major western financial institutions, such as HSBC, Société Générale and Goldman Sachs. 

Endemic secrecy in Libya’s oil sector allowed Gaddafi to persistently abuse national assets for personal gain. Since his downfall, oil refineries have acted as key battlegrounds in the ongoing conflict between  militia groups and forces loyal to the elected Libyan government.

Oil companies have a key role to play in ending the mismanagement of the past. While some international oil companies seem set on clinging to the secrecy of the past, new global standards of transparency are emerging around the vast payments made by these companies to governments.

This process began with the passage of the U.S Dodd-Frank Act in 2010, the result of years of campaigning and investigations by Global Witness and a strong worldwide coalition. This was followed by mandatory disclosure laws which have recently been passed in the European Union. These laws require extractive companies to report the payments they make on a country-by-country and project-by-project basis.

In order for Libya to turn the page on the oil-fuelled corruption and conflict of the past, its government must publicly commit to transparency and put in place systems to deliver on that promise.  Meanwhile international oil companies should get behind laws requiring them to publish the payments they make to governments on a project-by-project basis.