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Rebels might redraw Libya’s oil contracts

Published time: August 22, 2011 22:47
Edited time: August 23, 2011 03:17

A worker's helmet lies on the ground at the Zawiya oil refinery, some 40 kms west of Tripoli (AFP Photo / Filippo Monteforte)

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The markets reacted nervously to Libyan opposition forces’ offensive on Tripoli. Hopes are high that oil production in Libya will soon resume. But the rebels now say that some old business partners might no longer be welcome.

­Italy’s Foreign Affairs Ministry has confirmed that the Italian oil company Eni SpA, the biggest foreign investor in Muammar Gaddafi’s Libya, has sent a technical team to assist production re-launch.

The markets reacted positively to the statement, with oil prices going up a bit. Analysts hope that oil production in Libya, which amounted to 1.6 million barrels a day before being disrupted by the civil war, could soon return to significant levels.

But other major oil producers are cautious about joining the race back to Libya. BP said on Monday that it would return to Libya to continue its exploration program “when conditions allow,” Agence France-Presse reported.

Still, analysts believe that oil giants could be the actual beneficiaries in postwar Libya, especially the countries that have shown the most support for the opposition. The Libyan opposition has hinted that some business contracts will be preferred if they win.

"We don't have a problem with Western countries like the Italians, French and UK companies,” Abdeljalil Mayouf, information manager at the Libyan rebel oil firm Agoco, told Reuters. “But we may have some political issues with Russia, China and Brazil."

This could mean that countries that have been calling for the Libyan conflict to be resolved through negotiations might see the loss of billions of dollars in oil contracts. US and European oil giants, meanwhile, might have the market left to themselves and perhaps new players like Qatar.

Pierre Guerlain, a professor of political science at the University of Paris Nanterre, says that no matter who ends up running Libya, the West will get the country’s oil.

“It looks as if all the conflicts that exist in Libya are going to take a long time to resolve, and right now there is a kind of political vacuum,” Guerlain said. “The rebels, they killed their own commander not so long ago, so they are a group of very different people. No one can tell what is going to happen. You support a group and then a group comes to power, and of course they are going to forward contracts to those who helped them. Basically rebels came to power thanks to NATO – and NATO in this particular case was France and the UK – so it is very likely that France and the UK are going to benefit economically.”


­Brian Becker, national coordinator of the Answer anti-war coalition, says that NATO "stocked and provoked and armed the civil war which destroyed a big part of the country."

Becker predicted NATO will try to maintain its role in the country even after its mission there is over.

"I think if NATO stays it will have a noble, humanitarian-sounding sort of excuse or pretext for the role – but ultimately it's to dominate this country," he declared.


Eric Margolis, a war correspondent, columnist and author, has no doubt that NATO will stay beyond its UN mandate, which is to expire September 27.

"The wording of the mandate can be changed, making it a more humanitarian-sounding mission, but NATO has invested a lot of money and effort in this operation, and the lure of oil is overpowering,” he said. “NATO has obviously committed to staying in Libya – maybe a long stay.”


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