Friday, 26 August 2011

The Oil Scramble and Divvying Up the Spoils of War.

The announcement today of an official NTC government in Tripoli by the Minister for Finance and Oil, Ali Tarhouni ( a University of Washington in Seattle economics professor ) has been accompanied by promises that the West will be favoured for its support for anti-Gaddafi insurgents.

In the West, Tarhouni is said to be favoured as a future leader of Libya.He has already indicated that existing contracts will be honoured, the endgame is for those nations that explicitly backed the 'rebels' to get a larger slice of the drilling rights and concessions.

As a CNN report confirms (Oil companies ready to jockey for position in new Libya, August 26 2011),

However unpredictable the current situation, European oil companies are gearing up for battle. The major players from there before the uprising began were Italy's Eni, Total of France and Repsol. British giant BP is also trying to get a larger slice of Libyan exploration projects. It concluded a $900 million deal with the Gadhafi regime three years ago to explore for gas. Other players include OMV of Austria and Marathon. China, through its state-owned CNPC, had begun exploring off the Libyan coast to help feed its insatiable appetite for Africa's mineral wealth but recently terminated several contracts because of the unrest.

Libya is the site for a scramble for resources as oil and gas that is set to become more pathological during the course of the 21st century. across the globe from Africa, to the Middle East and Central Asia. Whether Libya's NTC will be able to acheive what was not in Iraq is by no means certain.

What is dangerous would be the sort of shock therapt approach to privatising Libya's oil companies far too quickly so that the NTC presides over squabbling and a widening of ethnic and tribal divisions, not least as Islamist militants played a role in overthrowing Gaddafi.

Whilst the NTC is seeking reconciliation with some in Gaddafi's regime plus investment from the West to a tune of $2.5 dollars to rebuild Libya and prevent the state apparatus crumbling, if Gaddafi is not quickly defeated, then the resulting instability could lead to discontent.

Not least if the emigres in the NTC fail to ensure transparency in the privatisation deals and Western nations put short term greed and the need for 'fast track' oil production at the expense of a process of breaking up the stranglehold Gaddafi's cronies have over the state LNOC.

The need to get Libya's high quality crude oil flowing again is important not only to the reconstruction of the Libyan economy after six months of conflict but also to the Western states reeling from the prospect of a double dip recession and a need for falling petrol prices.

The question is whether Tarhouni is the man to carry out these refoms successfully without the kind of catastrophic doctrinnaire approach taken after 2003 by Chalabi. Tarhouni has been in exile since 1973 and has been described by an academic colleague as "fundamentally American".

Tarhouni, like almost all of the NTC hails from Benghazi, the capital of the former Ottoman and then Italian colony of Cyrenaica, which only became united with Tripolitania and Fezzam to make the new libyan state in 1951.

Tripoli was stormed primarly, however, by Western Libyans with a great deal of help from forces aided and guided by the CIA, MI6 and both French and British special forces, a covert operation that has helped flood Libya with angry young men with access to arms.

This includes those in the east in areas like Dernah whose defences have been led by Abdelkarim al-Hasadi of the Libyan Islamic Fighting Group who previously had been a jihadist arrested by US forces in Afghanistan in 2002, and now claims he opposes Taliban style theocratic regimes.

The absurdity of empowering Islamist jihadi warriors after having previous backed Gaddafi after 2003 for renouncing non existent WMDs in return for Western oil companies investments and repressing Al Qaida elements is stark. So much for the 'war on terror' against 'jihadists now.

The very SAS that was used to train Gaddafi's forces to fight against jihadists based on their experience in Afghanistan as recent as 2009 was just two years later being used to train militias with jihadist tendencies in places such as Misrata.

The NTC will need to act rapidly if those with guns as part of independent militias as opposed to organised rebel forces more under their control are not tempted to turn their weapons on them should their tribal leaders be excluded from the benefit of Libya's oil privatisation by Tarhouni.

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