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Books on Libya
REPUBLICAN REFERENCE
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: 010 - (01/09/04)
Increasing the Flow of Oil, Stopping the Flow of People
The process of rehabilitating the Libyan Jamahiriya with the West has been
largely driven by the need to exploit new sources of oil that are both
geologically and geo-politically advantageous.
Nevertheless, European governments, which share the Mediterranean Sea with
Libya, have also sought to increase ties with Libya in order to cooperate on the
sensitive issue of illegal immigration.
Many illegal immigrants board makeshift craft in North African ports hoping to
reach the shores of Italy, as their first port of entry to Europe.
The European Union has often complained that some governments, such as that of
Italy, have not done enough to control the flow of illegal migrants.
The new Italian EU Commissioner, a veteran ex Christian Democrat and member of
the Forza Italia ruling coalition, Rocco Buttiglione therefore suggested that
Libya must be readmitted as full partner in system of international
Mediterranean cooperation in order to guarantee a frequent and regular contact
over issues of mutual concern.
The incoming Buttiglione will responsible for emigration as part of his duties
as EU commissioner for justice, freedom and security.
He has advocated that all remaining obstacles to full cooperation between the EU
and Libya be removed - even the issue of compensation for German victims of
terrorism has been resolved now.
Buttiglione's comments came just as Italy's Prime Minister Berlusconi was
meeting Col. Qadhafi, for the second time since the Libyan 'Glasnost' began to
discuss ways to reduce the flow of illegal migrants departing from Libyan
shores.
For its part, Libya claims it is helpless in the face of overland immigration
from the Sahel and the Horn of Africa, and that sanctions have deprived it of
acquiring the basic means of patrolling its long shoreline and vast and
difficult to patrol borders across the Sahara.
Accordingly, Buttiglione and Berlusconi would like to secure stronger ties in
order to help Libya stop the migrants from ever reaching the shores of the
Mediterranean in the first place.
By removing all remaining sanctions, Italy hopes Libya will be included in, and
bound by, a system of Mediterranean accords, which will facilitate the
coordination of immigration controls between Libya and the EU.
Similar agreements have been reached with Tunisia; however, the strategy there
has focused on developing commerce and industry - especially textile- through
European direct investment in a policy designed to create jobs in the very
sources of migration.
While Libya's economy remains overwhelmingly dominated and built around the oil
sector, such initiatives are not yet possible even while Qadhafi's current
vision includes the desire to diversify investment and sources of revenue.
Berlusconi met Col. Qadhafi in Sirte, Qadhafi's official capital built out of an
Oasis in the mid-90's, and discussed the matter over the course of a meeting
lasting five hours.
The two leaders, one more flamboyant than the other, said that they had reached
an understanding over the problem of illegal immigration and that it is a
problem, which is as much European as it is African.
Libya has served as base from which to reach Europe while the current Italian
conservative coalition has been very harsh toward illegal migrants.
A key ally of Berlusconi, is the separatist party of the Lega Lombarda. One of
its members has very recently suggested that the Italian coast guard shoot
migrants if they do not turn back.
Libya is the only country in North Africa not to have yet signed an agreement
over the issue of immigration.
The problem is, as Qadhafi has hinted a much larger one. Africans fleeing
starvation in their own countries pour practically unchecked across Libya's long
desert border with Chad, hoping to cross the Mediterranean to Europe.
Berlusconi wants Libya to set up reception centers in Libya where immigrants can
be processed and - say critics of the scheme - held indefinitely, instead of
going to Italy.
Berlusconi's visit was also motivated in no small part by a desire to maintain
the special relationship that Libya has long had with Italy, which was its
former colonial power.
As Libya's markets and energy resources have been made available to the whole
world since the end of sanctions, Berlusconi wanted to secure Italy's privileged
economic relationship as Libya's main trading partner.
Libya recently signed a $5.6 billion deal with the Italian energy company ENI to
supply natural gas through a 370-mile pipeline under the sea to southeastern
Sicily.
Unlike in previous decades since the Qadhafi revolution of 1969, Libya has
attracted other powerful suitors such as the United States, whose oil companies
are looking for outlets from the instability of Iraq.
For his part, Col. Qadhafi wants the Europe to supply him with night vision
equipment and bulletproof vehicles to be able to patrol the border more
effectively, and surveillance planes and boats to stop the huge traffic of boat
people in the Mediterranean.
Illegal immigration is a problem, for Libya as well said Qadhafi. Tripoli is
full of African migrants seeking refugee status.
The UNHCR in downtown Tripoli located in the former Italian colonial villa that
has housed the UNDP office since 1948 always has a long line up of hopeful
migrants from Sub-Saharan African countries ranging from Sudan to Sierra Leone
hoping to receive official refugee status.
In the alleys and slums bordering on Tripoli's fashionable Girgaresh Street,
many of these migrants live in bad conditions and become involved in alcohol and
drug racketeering rivalling local Libyan gangs.
In 2000, this volatile mix produced violent clashes between Africans and Libyans
vying for control of the territory leaving many dead. The police staff handling
migration problems is unprepared and untrained.
Thousands of prisoners wait to be expelled at the infamous Janzour jail, just
five minutes outside Tripoli.
It was interesting that just as Berlusconi urged Qadhafi to monitor migrants,
while Qadhafi explained how difficult a problem this was for Libya, Four
Eritreans, among a group expelled from Libya, have given themselves up after
hijacking a plane flying them home and forcing it to land in Khartoum.
The four surrendered after the flight landed in the Sudanese capital. Libya
admitted to having expelled 229 illegal immigrants of various nationalities.
The decision to deport the foreigners was due to its "willingness to fight
against the growing influx of illegal immigrants entering Libya and who are
harming our relations with Europe."
The expulsions and the consequent hijacking occurred two days after Italian
Prime Minister Silvio Berlusconi visited Tripoli for talks with Qadhafi on the
problem of immigrants heading for Italian shores from Libya.
As for Sudan and the ongoing crisis in the Darfour area, President Omar Hassan
El Beshir of Sudan asked Col. Qadhafi to intervene in finding a solution for the
crisis.
President Beshir agrees with Colonel Qadhafi in opposing foreign intervention in
Darfur hoping that the crisis might be solved through the repatriation of
refugees.
A week prior to the official request delivered in talks with the Sudanese
Foreign Minister Libya hosted informal talks in Sirte between representatives of
the Khartoum government and the two Darfur rebel movements as well as
representatives of the African Union and neighboring Chad, which hosts the
lion's share of Darfur refugees.
Libya's progress toward better relations with Europe and the West was also
noticeable in the unexpected reception of Amnesty International's report on
human rights violations in Libya first presented to Libya in April 2004.
The report entitled "Libya: Time to make human rights a reality," was
published following a two-week visit to Libya last February by an AI delegation.
The delegation met with Qadhafi and held talks with Libyan ministers, prisoners,
lawyers and magistrates.
Amnesty International officials have noted that they were optimistic about the
evolution of the dialogue with Libyan authorities and their availability to
discuss human rights issues.
For its part the Libyan government has presented a human rights bill to be
examined by the People's General Congress (what most people around the world
call a parliament) in order to develop a legal framework for human rights
issues.
Oil & Energy
In late August, Libya has invited international energy firms to bid for
exploration in a 78,000-square mile area in the north and West of the country.
The state-owned Libyan National Oil Co. said the bids would be for exploration
and production rights in the area.
They would be divided into 15 blocks at cost of $130,000 per submission. The
process will take place in London and Tripoli. British, Chinese, French, Russian
and US companies were expected to bid for the project.
Meanwhile, Libyan Oil output is rising: energy minister Fathi Ben Shatwan on
13th July that output had risen to 1.65 mm bpd since the beginning of 2004.
Output was expected to rise to the OPEC approved maximum level of 1.7 mm bpd.
Libya plans to eventually raise production capacity to 3 million bpd, a process
experts have suggested might take up to seven years.
The minister believes the production rise will be made possible by relying
exclusively by enhancing existing fields.
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FOREIGN ECONOMIC COOPERATION
Turkey-Libya JEC meeting progresses well
The 19th meeting of Turkey-Libya Joint Economic Commission (JEC) started in
Ankara on August 5th. Turkish State Minister, Kursad Tuzmen, and Labour and
Infrastructure Minister, Muhammad Matuk Muhammad, of Libya presided over the
delegations of their respective countries, Anadolu News Agency reported.
Recalling that the trade volume between Turkey and Libya reached US$1.3bn last
year, Tuzmen said that exports from Turkey to Libya increased by 12% in the
first half of 2004. "We target to increase our trade with Libya to a volume
up to US$3bn by the end of the year," he said. "In order to reach this
target, we should sign a series of agreements to prevent double taxation, to
encourage and protect investments mutually and to cooperate in customs and in
agriculture. Also, the most important project is the formation of a free trade
zone."
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FOREIGN INVESTMENT
Libya and Iraq closer to opening oil industry
Libya and Iraq, two of the world's largest holders of oil, have taken
significant steps towards opening their industry to international investors, the
financial Times reported on August 17th.
Libya launched its first bidding round to allow international companies to
explore for oil and natural gas since the US removed its sanctions from the
country.
Also Iraq attracted several big oil companies - including Royal/Dutch Shell and
Bp - to bid on the right to advise Baghdad on how best to develop Kirkuk and
Rumail, two of its biggest oil fields.
Energy companies are struggling to find new reserves of oil and are counting on
investment opportunities to open up in countries such as Iraq, Libya and Russia.
Although Iraq's tender is a preliminary step, it is an important chance for
companies to establish a relationship with the world's second largest holder of
oil reserves, company executives said.
Meanwhile, Libya's tender will allow US companies to return to the country where
their European counterparts - such as Eni of Italy, Total of France, Spain's
Repsol and OMV of Austria - have already begun to invest while US sanctions were
in place. However, analysts said that Libya was less desperate to attract
investors this time around, and so the terms were likely to be tougher.
"The tax terms are biddable, that will get people in bidding. The Libyans
can always say no," said Caroline Cook, analyst at Duetsche Bank.
"Anything that is in the south-west of the country near the Algerian border
is interesting, as are the more mature fields in east. The Gulf is more frontier
stuff and offshore there is real potential for gas."
Tripoli's two main concerns in deciding the winner of the rounds are said to be
the size of the signing bonus offered by the bidding oil company and the
percentage of share the Libyan side is able to retain.
The country is expected to embark on road-shows in London and Houston to outline
the 15 lots for which bids are due on January 10th.
"This is good news," said John McInespie, lawyer at Butera &
Andrews, a Washington DC law firm involved in brokering deals in Libya.
"The Libyans have done this in their own time and will not put their eggs
in one basket so we think that there will be plenty of room for the smaller
players."
Shell, which has already signed a memorandum of understanding for a natural gas
deal in Libya, expects to finalise the agreement "in the coming
months," according to a company spokesman.
Libya's national oil company needed the expertise of foreign companies to meet
its production target of 2m barrels a day by 2007, analysts said.
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