Al-Houdairi: Compensating and increasing oil reserves is a strategic challenge. Exploration is a national necessity to ensure financial stability.
Libya – Oil expert Othman Al-Houdairi affirmed that increasing and compensating oil reserves is a key strategic challenge for the Libyan state. Building a secure economic future requires serious attention. It means addressing bottlenecks hindering the development of this vital sector.
In exclusive statements to Sputnik, Al-Houdairi explained that oil reserves are the backbone of the national economy. The general budget relies mainly on oil revenues. He warned that any decline in reserves or weak compensation and exploration policies directly impacts financial stability. It also affects the state’s ability to meet its obligations. He emphasized that investing in exploration and field development is no longer an option. It is an urgent national necessity.
Al-Houdairi pointed out that geological estimates show Libya possesses significant oil and gas potential. This is particularly true in the Murzuq and Ghadames basins. It also applies to offshore areas in the Mediterranean Sea. He believes these areas have not received enough attention in past decades.
He affirmed that exploiting this potential requires a long-term strategic vision. It also needs supportive political will and administrative and technical stability. Huge financial investments and advanced technologies are also essential. He called for utilizing major experienced international companies. This is instead of relying on small, less efficient companies, which could complicate the crisis further.
Al-Houdairi noted that the exploration sector faces administrative challenges. These include weak transparency and governance. There is also an overlap of powers among competent authorities. Moreover, administrative leadership in the National Oil Corporation and its companies has been unstable since 2011.
He explained that complex bureaucracy in granting licenses and approving budgets poses real obstacles. The absence of updated national databases also hinders sound investment decisions.
On the technical front, Al-Houdairi highlighted insufficient investment in modern seismic surveys. Infrastructure in several fields is outdated. Some reservoirs are dilapidated. Pipelines are old. Maintenance work is poor.
He also warned of a shortage of specialized national competencies in geology and geophysics. This increases reliance on foreign companies. A strong national evaluation and monitoring system is absent.
Al-Houdairi stressed that the legislative environment needs a comprehensive update. It must keep pace with global developments in the oil and gas industry. He warned of ambiguity in contract models. There are also multiple contractual forms outside conventional legal frameworks. Multiple legal references and weak investor guarantees reduce investment attractiveness. This is especially true in high-risk exploration areas.
Al-Houdairi called for restructuring oil sector management to address bottlenecks. He advocated strengthening the National Oil Corporation’s independence. Its management should be entrusted to national experts. These experts need legal and economic support. He demanded a comprehensive national program for onshore and offshore geological and seismic surveys. Investment in modern technology through partnerships with established international companies is crucial. This will build national capabilities to lead exploration and development efforts.
Al-Houdairi also considered updating oil legislation and unifying legal references essential steps. Providing clear and attractive investment guarantees is vital. These measures will attract international partners. They will also stimulate direct investment in the exploration sector.
Concluding his remarks, Al-Houdairi emphasized that increasing oil reserves cannot be separated from diversifying income sources. This means developing manufacturing industries, agricultural projects, and tourism. It should be part of an integrated economic vision. Oil revenues must be used to build alternative productive sectors. This will ensure a more resilient and sustainable economy.
He affirmed that Libya’s economic future depends on transitioning from immediate consumption of oil wealth. It must move to strategic reserve management. He warned that ignoring these challenges could jeopardize the oil sector’s future. It risks long-term collapse.