Libya, the site of Africa's largest crude-oil reserves, has $30 billion deposited in a special fund that collects budget surpluses generated by high petroleum prices, the central bank (CBL) said.
The governor of the central bank, Ahmed Menesi, gave the figure at a political rally in the coastal town of Sirte last night, Libya's official news service JANA said today.
The government set up the fund, called the "spared budget", in the 1990s with the idea of passing on part of the oil wealth to future generations. The central bank manages the fund, investing it internally and abroad in bonds and stocks and in the foreign currency markets, Prime Minister Shokri Ghanem told Bloomberg News in January 2005.
Oil prices rallied over the past three years, to more than $70 a barrel in August from below $30. Libya's oil revenue has more than tripled since 1998 and is expected to reach $19.4 billion this year, according to the U.S. Energy Department's fact sheet.
Libya's public budget surplus is forecast at $10 billion for 2005, Libyan leader Muammar Gaddafi told yesterday's rally. Oil sales make up 95 percent of the foreign currency revenue and 75 percent of the public budget.
In April 2005, local banks began lending money from the special fund to finance small private projects and housing. The government allocated $3 billion for this program as it seeks to increase the share of private businesses in the economy to make up for losses inflicted by more than a decade of international sanctions.
Libya, the eighth-largest producer of the 11-member of the Organization of Petroleum Exporting Countries (OPEC), is now trying to attract $30 billion to its oil industry. It intends to raise production capacity to 3 million barrels a day before the end of the decade, from about 1.7 million.
As part of this plan, the North African state will tomorrow pick the winners among international oil companies in a drilling-rights auction, the second to be held since oil was discovered there in 1959.
Libya gave 15 exploration permits to oil companies including Occidental Petroleum Corp, Chevron Corp. and Amerada Hess Corp. in the first auction, held in January 2005.
In the second round, it is auctioning permits to search for oil and gas in 26 areas offshore and onshore, covering a total of 100,000 square kilometers (38,600 square miles), almost the size Cuba. Before the auctions, Libya awarded contracts after talks with companies.
Libya, led since September 1969 by Gaddafi, came under U.S. and United Nations sanctions after being accused of sponsoring terrorism, including the 1988 bombing of a PanAm plane over Lockerbie, Scotland. The sanctions have eased since Libya agreed in 2003 to pay $2.7 billion to the families of those killed in the attack and to end programs to develop weapons of mass destruction.
Source: Bloomberg
