Countries who participated in the takeover of Libya were promised a share of the spoils. This is according to a letter published on Sept. 1 by the French daily Liberation, in which the rebels allude to a deal promising 35 percent of Libya’s oil to France.
Signed by the Popular Front for the Liberation of Libya (the forerunner to the National Transitional Council), the letter refers to a deal “to assign 35 percent of crude oil to France in exchange for its total and permanent support of our Council.” The letter, written in Arabic and dated April 3, says the deal was struck during the March 29 summit on Libya in London.
With proven reserves of 46.4 billion barrels of high-quality crude and equally huge reserves of natural gas, Libya has been in the sights of the U.S. government for years, along with many European states. Even though U.S. oil companies have been back in the country since 2004, and the French and Italian oil giants Total and Eni never left, they have not been happy with the terms.
As The New York Times reported (Nov. 15), “During his long rule, Colonel Gaddafi granted foreigners drilling rights on small patches of fields and made them sign agreements that gave the regime most of the profits and left them with most of the bills.”
Now that Libya’s oil and gas have been “liberated,” foreign energy companies are hoping to keep more profits for themselves and leave the Libyan people with more of the bills.
Vultures circling over the battlefield
The takeover of Libya was not even finished before foreign leaders and businessmen were flooding in to claim a share of the country’s resources. The rebels’ key backers—the Western NATO members and Qatar—are expected to win big contracts.
British Prime Minister David Cameron and French President Nicolas Sarkozy went to Tripoli to meet with the NTC on Sept. 15, and Secretary of State Hillary Clinton made the trip on Oct. 18, in the midst of the siege and terror bombing of Sirte and the mass executions of dark-skinned Libyans and foreign workers. CNN Money reported (Nov. 4), “As the rebels stormed through Sirte in October, a planeload of French business executives flew into Tripoli to glad-hand the victors, and smaller groups of German and British executives have since arrived to test the waters.”
France-based Total was one of the first companies to restart oil production after the takeover. Although French Foreign Minister Alain Juppe denied knowledge of the 35 percent agreement, he considered it only “logical and fair.” “We are not alone, Italy is also there, the U.S. …” Juppe added that intervention “is expensive” and it is an investment for the future “because a democratic Libya will be a country that will develop, it will be a factor [contributing to] the stability, security and development of the region.” Incredibly, France flew 35 percent of the bombing missions in Libya.
By far the biggest foreign oil producer in Libya is Italy’s Eni. Paolo Scaroni, the CEO, “visited the rebel leadership in Benghazi last April, flying in via helicopter from an Italian warship.” (The New York Times, Nov. 15) With NATO preparing for war against Libya, Eni was worried about its extensive investments there.
Later that same month, the leader of the NTC, Mustafa Abdel Jalil, went to Rome to meet with the Italian foreign minister. Abdel Jalil assured the minister that once the rebels took control of the country all energy contracts with the previous government would be respected. Italy then joined the operation with extensive sea and air support, including bombing sorties. After the takeover, a former Eni executive was made Libya’s oil minister.
United States first in line for oil shipments from Libya
The United States directed the seven-month war for Libya, providing leadership on the military, diplomatic, intelligence and propaganda fronts. It carried out 16 percent of air strikes and deployed 8,000 personnel on several ships and aircraft. Symbolically, the United States secured the first shipment of oil for ConocoPhillips.
According to The New York Times (Nov. 15), “Foreign oil giants, including the American companies Marathon and Hess, certainly want to be in Libya, and the jockeying has already begun for the chance to drill new fields on profitable terms.” Energy services companies Halliburton and Baker Hughes are also taking part in the reconstruction bonanza.
Britain joined the operation, as it did the takeover of Iraq, on behalf of British Petroleum, which had made millions in Libya before Gaddafi nationalized its concessions in the 1970s. BP had already made plans to return, signing a huge $900 million exploration and production agreement with the National Oil Company in 2007.
The 2007 contracts gave BP the rights to explore 21,000 square miles onshore and offshore of Libya, but exploration had not begun due to delays, including the Gulf oil spill. Drilling was set to begin in June 2011, so BP was anxious for Britain to be on the winning side of the war. The British government rallied to the rescue of the transnational oil giant, carrying out one-fifth of the total bombing missions, firing 1,420 precision-guided munitions and hitting more than 600 targets. BP has been promised exploration projects by Libya’s new rulers.
