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LIBYA

 

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Area (sq.km)
1,759,540

Population
5,499,074

Capital
Tripoli

Currency
Libyan dinar 

Leader 
Col Mu'amar al-Qadhafi

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Update No: 012 - (02/11/04)

Which US Presidential candidate is better for Col. Qadhafi?
During the summer there were reports of a Libyan sponsored plot to murder the Saudi Crown Prince Abdallah. The assassination had allegedly been planned to take place during the summer of 2003 according to the Libyan intelligence officers that have confessed to the plot under interrogation in Egypt and Saudi Arabia. In late October of 2004, the story of the plot has re-surfaced with further details about its planning. The two Libyan agents involved were Mohammed Ishmael and Col. Abdel-Fattah al Ghoug, who are, according to official sources, being held in Saudi Arabia. In total the assassination plan engaged fifteen conspirators, who have all been arrested including six Libyans and about nine Saudi jihadists, who had planned to kill Crown Prince Abdullah at a public event or during a motorcade. Still according to reports of the interrogations, the Libyan agents had access to funds totalling 4.5 million Saudi riyals (ca. $1.2 million) while the conspirators had already received a previous wired sum of $1 million to an account in the Saudi Kingdom monitored by Saudi authorities, as it was suspected of being an al-Qaeda account. As was suggested in previous reports, the United States would be severely embarrassed were the story of the plot to be true. 
Throughout the US election campaign the Bush team has presented Libya as one of the greatest success stories of his administration's foreign policy. Beyond occasional and minor citations in the mainstream media, the story has received little attention. During the presidential debates George W. Bush literally used the rehabilitation of Moammar Al-Qadhafi and Libya as one of the most revealing effects of the wisdom of his administration's war on terrorism and war in Iraq: "Look at Libya," Bush said in one of the debates. "Libya was a threat. Libya is now peacefully dismantling its weapons programs. Libya understood that America and others will enforce their doctrine, and the world is better for it." One of the detained - since July 30th, 2004 - plotters of the supposed Saudi prince assassination is the Yemeni-born Muslim leader Abdurahman Alamoudi. He provided the damning evidence that presented the 'casus-belli' between Col. Qadhafi and the Crown Prince as being an insult the latter proffered about the Libyan dealer. 
Libyan opposition members in London have been reportedly disappointed by the public relations success enjoyed by Col. Qadhafi's regime buoyed by the Bush administration's pronouncements on the rehabilitation of Libya. They are touting the Saudi murder plot story as evidence that Col. Qadhafi has not changed his ways at all. Nevertheless, while Bush has scolded Qadhafi in private - according to sources close to Ashur Shamis, the London based Libyan journalist and member of the opposition, who first broke the story in July - it is unlikely that the plot will be used to reverse the détente established between the United States and Libya. Indeed, the Bush administration has become well aware of the dangers of placing unquestionable trust in the claims of exiled opposition members from the Middle East, as the Iraqi exile Ahmad Chalabi's claims of a swift pacification in Iraq have dramatically unravelled. Nevertheless, Libyan dissidents are probably correct when they suggest that the boost given to the current Libyan regime by the United States and the West will do very little to change the Libyan political system. Libya will continue to rely on oil for its revenues and while there has been much talk of diversifying the economy in terms of both sources of income and modes of production, Libya's oil has become an even more strategic asset as the promised sources in Iraq remain effectively unavailable.
Nevertheless, the next few weeks could pose a potential challenge for Col. Qadhafi. The election in the United States is far from decided. At time of writing, not a week before the election, the main presidential candidates are still even in the polls. Should Sen. Kerry win, Qadhafi's position vis-à-vis the United States would have to be in many ways re-negotiated. President Bush has made Libya an example of the wisdom of his version of 'Pax Americana' in the Middle East. The very contrast between the 'Mad Dog of the Middle East' image promoted by President Reagan in the 80's and the 'born-again' leader, who has suddenly seen the value of peaceful cooperation with the world has been for the last year one of the pillars of Bush's justification for the war in Iraq and the so called 'War on Terror'. A Kerry White House would be pressured by different interest groups - more environmentally and human rights minded perhaps - to be more critical of regimes like Qadhafi's, even if they are sitting on very strategic sources of oil. The impetus to re-establish links with Libya came, after all, from the oil industry itself when some of the major US oil exploration companies complained to the Bush administration last November that they needed new sources to exploit - Iraq had already shown itself to be an untenable proposition. The capture of Saddam Hussein and Col. Qadhafi's dramatic declaration to abandon the weapons of mass destruction programs he was purported to be advancing came almost simultaneously in December 2003. 
While it is unlikely that Kerry will be immune from pressure by oil companies, he has proposed a more multi-lateral approach to the Iraq problem and does not have the challenge of having to justify the war by parading reformed Arab dictators - that have given up grossly exaggerated weapons. To a certain degree, a Kerry White House might actually be in a position to demand some more tangible human rights reforms in Libya. In other words, the Libyan leader would be held more accountable for reforms. Moreover, Libyan opposition groups will probably feel more empowered to gain influence over the Western governments that have vociferously presented Libya as one of the diplomatic successes of the US led war on Iraq - not surprisingly the first governments to do so were all Bush supporters, i.e. the UK, Italy and Spain. Conversely, should Bush return to the White House the Saudi Plot story will necessarily continue to be buried, as the Saudis are probably not especially happy about the new relationship between the United States and Qadhafi. In fact, the promotion of Qadhafi as a reformed leader while Saudi Arabia has received some of its worst public relations ever in the last few years - no thanks to Michael Moore whose documentary film 9/11, is expected to constitute an important election factor. Meanwhile, the official Libyan news agency JANA has not been doing the United States any favours by suggesting that the Iraqi resistance to the American occupation is legitimate. Perhaps in response, the Iraqi defence minister suggested that the Libyan regime has been aiding Iraqi insurgents based in Syria. Strategically, Qadhafi, veiled his exhortation to resist occupation in purely secular terms suggesting that the various armies inspired by religious affiliation and fervour are doing a disservice to a legitimate aspiration of self-determination by the Iraqi people. Qadhafi has therefore maintained a certain degree of independence. He knows that so long as Bush needs him, he doesn't have to sway too much from his course. He also knows that Libya and his regime, in particular need additional sources of oil for sustenance. The Bush administration and its strong oil industry backers are more likely, if ironically, to be more beneficial to the Libyan regime than a Kerry administration, which will probably be somewhat more receptive to the influence of environmental groups, although one should not expect any major reversals of US policy for that reason where US energy interests are concerned.

In Energy
In October Italy's ENI SPA and Libya's National Oil Co. announced that their joint trans-Mediterranean pipeline central to the Western Libya Gas Project (WLGP) has been completed. The pipeline is 520-km long and 32-in. in diameter. It will be known as Greenstream and connects Mellitah, Libya - not far from Tripoli, with Gala, Sicily, at a depth sometimes reaching 1,127 m. underwater. The 7-billion-euro WLGP will move gas and condensate from Wafa field in the desert near the Algerian border and Bahr Essalam field 110 km offshore to a new processing plant at Mellitah. The Bahr Essalam platform is called Sabratha. It is expected that at full capacity, Wafa will be able to produce 4 billion cu m/year of gas. Two 530-km pipelines, with diameters of 16 in. and 32 in., extend from the field to Mellitah. Bahr Essalam will be able to produce as much as 6 billion cu m/year. Libya and Italy will split the resources fairly evenly with Libya and Italy each using 2 billion cu m/year of WLGP gas.

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ENERGY

Libyan natural gas flows in new line

Libya has begun pumping natural gas to Europe through a just-completed undersea pipeline, marking the first concrete step in the former pariah state's plan to dramatically increase its exports of gas and oil to the energy-hungry West, the Wall Street Journal Europe reported.
The Greenstream pipeline, part of a €7bn gas project by Italy's Eni SpA and Libya's National Oil Co, comes on line as Libya is in the midst of a big tender process to lure Western investment to develop 15 new energy-exploration areas. The bids, to be submitted by Jan 10th, are being conducted under a new legal framework that aims to make the process more transparent.
Libya's overture to Western capital and customers comes as global oil companies are scrambling for fresh prospects at a time of tight supplies and soaring prices for oil and natural gas. The US eased commercial sanctions on Libya earlier this year, simplifying entry for American firms, after Libyan leader Moammar Gadhafi agreed to abandon his program to build weapons of mass destruction.
Recently oil prices jumped again on concerns over tight winter heating-fuel supplies and news that a strike in Nigeria had stalled some crude-oil exports.
Crude-oil futures sprang to a record high of US$53 a barrel recently in New York. Benchmark light, sweet crude-oil futures for November traded at US$52.71 a barrel, up 69 cents.
Libya wants to attract billions of dollars in new investment for oil-and-gas infrastructure over the next decade. The country aims to ramp up oil output to two million barrels a day by 2010 from about 1.6 million barrels now. Royal Dutch/Shell Group signed a preliminary agreement in March for a ling-term partnership with Libya's National Oil. Shell's corporate parents are Royal Dutch Petroleum Co of the Hague and London-based Shell Transport & Trading Co.
Libyan oil is highly prized in the industry because it is low in polluting sulphur and inexpensive to produce. While the country is eager for gas investment, it is likely to seek top dollar for its oil concessions.
US oil companies are keenly interested in returning to Libya's oil and natural-gas fields, from which they were barred after sanctions were imposed in the mid-1980s. After sanctions were lifter earlier this year, several companies that had been active in Libya - ConocoPhillips, Occidental Petroleum Corp, Marathon Oil Corp and Amerada Hess Corp - said they would like to return. They could face competition from US majors Exxon Mobil Corp and Chevron Texaco Corp, as well as smaller independents such as Anadarko Petroleum Corp and Apache Corp, which have been successful in other North African nations. Some European companies, including Eni, continued operating in Libya despite the sanctions.
Though the Greenstream pipeline was negotiated years ago under different rules that the new tender process, many are looking to the line as a test case for investment in Libya.
"If Greenstream goes well and the Libyans prove to be reasonable in their negotiations, this could turn out to be very significant for potential future projects," says Yvonne Sisler, manager of the global gas group for PFC Energy in Washington.
Planning for the 520-kilometer pipeline to Sicily began in the mid-1990s. Trade sanctions against Libya have since fallen and demand for natural gas has jumped.
"The project starts to make sense now, because it looks like the investment can come into Libya to increase production, and Europe looks like it can consume more gas," said Shane DeBeer, a partner with law firm Chadboune & Parke LLP in Moscow who follows investment in Libyan energy projects. "If you had asked me about this pipeline two years ago, I'd have scratched my head."
Libya's gas exports have been in a rut as sanctions kept out equipment and investment needed to upgrade the country's creaking infrastructure. Libya has had one customer for exported gas, Enagas SA of Spain, which has been importing about 1.5bn cubic metres a year of gas in liquefied form. By next year, Greenstream will be pumping eight billion cubic metres of gas to Sicily, about 10% of Italy's annual consumption.

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