Hydrocarbons in the Sirt Basin Libya have been found in multiple clastic and carbonate reservoirs from Precambrian to oligocene age. The middle Eocene Nummulite accumulations of Gialo Formation form important hydrocarbon reservoir interval within the Mesozoic-Cenozoic Sirt Basin that originated as large scale subsidence and block faulting commencing towards the end of the Early Cretaceous and continued to develop into the Miocene and perhaps to the present day. Reducing risk in exploration demands an understanding of reservoir facies development, which is governed by the type and distribution of depositional facies and their diagenetic history. Six depositional facies have been identified in respect with the detailed core description, petrographic texture and the faunistic assemblage. These are: Nummulite Facies, Nummulitic Discocyclina Facies, Nummulitic Operculina Facies, Discocyclina-Nummulite Facies, Bioclastic facies and Mollusca Facies. These facies and microfacies can be interpreted as having accumulated in open marine, fore-bank and bank setting. Well preserved large benthic foraminifera dominate the faunal assemblage in the Gialo Formation indicates deposition within the photic zone. Present day reservoir characteristics of the Gialo Formation are the net result of modification to the original depositional characteristics caused by diagenesis. Theses diagenesis took place on the seafloor, under burial, and in the meteoric diagenetic environments. Petrographic and petrophysical studies indicate that porosity and permeability in the Gialo Formation reservoir are the result of the depositional environments of deposition and diagenesis.