Libya is fertile territory for Scottish energy service firms looking to grow their business overseas, according to economist Tony Mackay.
The north African country’s oil and gas connections have been in the spotlight lately, because of the ongoing transatlantic row over the release of convicted Lockerbie bomber Abdelbaset al Megrahi.
Mr Mackay, of Inverness-based Mackay Consultants, said in his latest monthly commentary on Scotland’s economy that Libya was attractive to oil service companies north of the border for a variety of reasons.
He added: “The industry’s development has been seriously held back by the UN sanctions imposed after the Lockerbie bombing.
“The country’s oil and gas industry undoubtedly needs foreign assistance to upgrade many of the existing facilities and introduce modern technology.”
Scottish Council for Development and Industry figures published earlier this year showed Libya ranked 20th among energy supply-chain export markets for Scottish firms in 2008-09.
The country accounted for only 0.7% of Scotland’s £6.6billion oil and gas-related exports that year.
Mr Mackay said the value and market share could increase significantly over the next few years as a result of an exploration and production deal struck between BP and Libya’s National Oil Corporation in 2007.
It paved the way for BP returning to Libya’s oil and gas fields for the first time in more than 30 years.
Mr Mackay said: “If BP’s exploration efforts are successful in Libya, then there would be a big opportunity for the oil service industry in Scotland to increase its presence in the country.
“BP has committed spending up to £575million on exploration in three areas of the country, including the offshore Gulf of Sirte.”
Mr Mackay is working on a study looking at the potential for Libya to increase gas exports to the European Union.
He said: “There are already gas exports by pipeline to Italy and a small volume of liquefied natural gas exports, but there seems to be the potential for a big increase.”