ABSTRACT
This chapter describes the state of the world petroleum industry to the extent that it throws light on petroleum development in Libya, and particularly on the decisions of the oil companies and others to take concessions, spend money on exploration and, when successful, to undertake the development of commercial oil. The oil companies, being few in number and operating jointly in the production of oil, were able to establish a stable pricing system for crude oil without overt collaboration. This was accomplished by posting prices, i.e. publishing prices at which the posting company was willing to sell crude oil to third-party buyers at point of export from the producing country. The prices obtained for sales of fuel oil are of importance in the profitability of oil company operations, and its price movements indicative of the degree of oil company control, or lack of it, over market prices of oil products generally.
