The first reported petroleum occurrence in the Sirte Basin was observed in a coastal water well drilled by Italian colonists during the Italian-occupation . The Italian government embarked on geologic investigations of the area and produced a geologic map in 1934 . Shows of natural gas were observed in the late 1930s , but World War II interrupted exploration efforts . Competitive bidding for concessions was subsequently permitted by two mineral laws passed in 1953 and 1955 , and exploration by Esso , Mobil , Texas Gulf , and others commenced with seismic , magnetic , and gravity data being collected . From 1956 to 1961 giant oil fields were discovered . Libya started exporting oil in 1961 and by 1966 it was the 7th largest oil-producing nation in the world . During 1969 , output from the Sirte Basin had even exceeded production from Saudi Arabia ( 3 Mmbpd ) . Libya nationalized its oil industry in 1973 , and some American oil companies began withdrawing in 1982 , following a 1981 US trade embargo . By 1986 , the US government ordered remaining US companies to cease activities in Libya . In 1992 , the United Nations sanctioned Libya in response to the 1988 bombing of Pan Am Flight 103 . Additional sanctions applied by the US Sanctions Act of 1996 were relaxed in 1999 . Since then , American and other foreign oil companies have returned to resume their operations in Libya , led by AGIP ( Italy ) , OMV ( Austria ) , Veba ( Germany ) , Total ( France ) , Nimir ( Saudi Arabia ) , WOC ( National Oil Corporation , Conoco , Marathon , Amerada Hess ) , and ETAP of Tunisia
Pan Am Flight 103
Pan Am Flight 103
Sirte Basin