Libya’s National Oil Corporation has facilitated a strategic visit by private sector companies to the Sbea Industrial Complex, affiliated with the Military Industrialization Organization, in an effort to activate local manufacturing of oil industry equipment. The initiative, coordinated with the Committee for the Localisation of Oil Field Equipment of the Ministry of Industry and Minerals, represents an attempt to revive idle industrial capacity and reduce the country’s dependence on imports.
During the visit, delegates were briefed on the Military Industrialization Organization’s manufacturing and technical capabilities, particularly in producing mechanical equipment and spare parts used in the petroleum industry. The tour included field visits to several departments and workshops where guests observed manufacturing and production stages and were introduced to equipment used in various maintenance operations and industrial projects.
The Military Industrialization Organization, established in 1978 under the Qaddafi regime as part of a failed weapons manufacturing initiative, has been largely idle for decades. Officials stressed the importance of supporting local industries and developing partnerships between national institutions to contribute to the localization of certain industries and reduce reliance on imports.
The rationale for this policy has multiple drivers. Libya possesses existing manufacturing capacity that cost hundreds of millions of dollars and has been lying unused for decades, including millions worth of unused computerized numerical control equipment. The Applied and Engineering Research Agency of the Ministry of Defence owns several electronic blacksmithing turning machine workshops that could manufacture many spare parts, equipment, and tools.
The Libyan oil sector is estimated to import about two to three billion dollars worth of spare parts annually during normal operations. Localizing manufacturing for the oil sector could save hard currency, diversify sources of national income, lower the cost of producing a barrel of oil, create jobs for youth and university graduates, and help transfer knowledge and technology.
However, significant challenges remain. Questions persist about whether the aging equipment is too obsolete to be economically viable, and whether it would be cheaper to import the products it is meant to manufacture. Libya lacks a manufacturing ecosystem and has no major manufacturing clusters to support the sector’s needs on a wider level.
The ultimate test lies in whether Libyan state authorities can attract private sector investors to utilize this equipment to manufacture commercially viable products. Since 2023, the Committee for the Localisation of Oil Field Equipment has been speaking to potential public and private sector investors in Libya and abroad without success thus far. Conflicting vested interests between the National Oil Corporation, Ministry of Oil and Gas, Ministry of Industry and Minerals, and Military Industries Organization may also hamper progress unless the initiative becomes a strategic Cabinet Office policy.
Source: libyaherald.com