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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: 032 - (03/07/06)
Normalization at a Pric
The decision by the US administration to restore full diplomatic relations
with Libya after a 26 year hiatus has stumbled across a legal obstacle just as
the new diplomatic relationship was to take effect. The US embassy re-opened in
Tripoli on May 31 in a quiet ceremony, and both countries are planning to
appoint ambassadors in the near future. The issue, predictably, revolves around
a legal dispute between Libya and the families of the victims of the 1988
bombing of Pan Am 103 over Lockerbie, Scotland attributed to Libya. On June 29,
the US House of Representatives tried to vote legislation preventing Washington
from sending an ambassador to Libya until it pays the remaining $540m in
compensation still claimed by survivors of the Lockerbie victims as part of the
original $2.7 billion compensation agreement reached in 2002. The families fear
reasonably enough that the end of US sanctions, lawyers trickery and the removal
of Libya from the terrorism-sponsoring list would somehow preclude Tripoli from
having to pay the final instalment. Libya is in fact suggesting that, as it has
refused to make the final payment because, it argues, the US did not remove it
from the list before a deadline stipulated in the agreement. Libyan lawyers said
told the US that there was no longer any legal obligation on Libya to make the
final payments of $2 million to each family, because the agreement to keep the
final portion of the compensation package expired in December 2004, by which
time Libya was to have been removed from the 'list'.
The lawyer for the Lockerbie families say that the delay in removing Libya from
the terror list was only due to Libya's continuing dubious conduct, which still
showed a tendency for violent actions such as the very convincing allegations of
a plot to assassinate the then crown prince, now King Abdallah of Saudi Arabia
in 2004, which we have reported in past issues (archives).
The US administration has anyway been criticized for removing Libya off the list
of terror-sponsoring nations but the 45-day congressional review period is
ending, leading to official removal from the list. To avert worse criticism and
a flat-out crisis, Libya will likely have to concede to the families' reasonable
demands, in order not to any further compromise its position and that of the
administration that has favoured it. Defending its decision to remove Libya from
the 'List' - barely weeks after upholding the terrorism sponsoring status - the
US leadership counterattacked, saying that Congress' protests are suggesting to
such countries as Iran and North Korea that the United States does not abide by
its word, when it offers diplomatic advantages to countries that renounce
weapons of mass destruction (WMD). Libya is still being played as a diplomatic
success card by the United States leadership. As the Bush administration
continues to face a barrage of criticism over the Iraq war, Guantanamo Bay
prison, the various military cover-ups, telecommunications and the financial
records scandal, it wants to promote Libya as one of its - few - diplomatic
successes, which plays in Libya's favour. Perhaps, not surprisingly, other
powers involved in the Iraq and WMD controversy are also doing their best to
show off the Libya rapprochement as a success. The British Government said it
would protect and defend Libya in the case of a nuclear, chemical or biological
weapon attack, signing a deal on this on June 26. To silence critics that would
- rightly - point to the fact that oil was a more likely motivating factor in
removing Libya from the Terror List, the State Department also suggested the
rather oblique motivation that that a US embassy in Tripoli is necessary to
promote peace in the Darfur region of Sudan, and encourage economic and human
rights reforms in Libya.
Nevertheless, the diplomatic trapeze act may not be necessary, as Libya will
surely try to capitalize politically by paying the remainder of the
compensation. If the United States wants access to Libya's untapped oil
reserves, Libya needs that US exploration effort to expand. Libya also needs to
upgrade infrastructure and military equipment, and does not need to risk losing
that opportunity, one which comes upon achieving a full diplomatic relationship.
Libya also needs added diplomatic prestige as it carves out a new role for
itself in the North African region itself, where it has somehow encroached on
the pretensions of some of its neighbours, such as Algeria. Libya has been
expanding its African policies since the mid-1990's, when it abandoned plans to
rally the Arab world under a single nationalist banner to focus on Africa.
PAN-AFRICAN INFLUENCE A KEY GOAL.
Libya has played an important role in bringing the parties together to agree
on a peace plan for Darfur, but it also has shown interest in Mali, where the
Touareg rebellion has recently resumed. Tripoli, although it has no shared
border with Mali has been 'competing' with Algiers (which does), to act as the
neutral mediator, both seeking recognition to present themselves as the main
regional diplomatic players. Algeria has also gained significant US favour in
recent years, because Algeria has also helped the United States in its 'war on
terror'. Clearly, a good relationship with Washington would add credibility to
Tripoli's ambitions. Tripoli's intervention in Mali would serve to increase its
influence in the Sahel region and boost its position as a regional power. The
ambitions of regional powers often become the opportunities for major powers as
the strengthening of security that is often entailed as the excuse for
diplomatic intervention, often lead to contracts with defence companies of major
powers, who are happy to sell billions of dollars of military hardware. Russia
has been particularly active in this regard, and after dealing with Algeria,
Vladmir Putin is preparing to visit Morocco in September, with likely ambitions
to secure some defence contracts. The diplomatic opening to the United States
would make Libya a legitimate candidate for such contracts from the EU, Russia
and of course the United States.
GAZPROM DEAL
A recent deal between Gazprom and Libya's NOC suggests more cooperation with
Russia is also in the works. Gazprom OJSC and Libya will soon sign a Memorandum
of Cooperation in the gas field, as agreed during a meeting between Alexander
Medvedev, Deputy Chairman of Gazprom, and Shukri Ghanem, now Chairman of NOC and
until recently the prime minister. Under the agreement, Gazprom is to
participate in developing Libya's gas infrastructure, production, transportation
and processing of hydrocarbons. For its part, Gazprom would be able to explore
Libyan fields in accordance with the agreement on assets exchange with the
German BASF, which owns Wintershall oil. Libya's proven natural gas reserves
total some 1.49 trillion cubic meters, making it the fourth largest in Africa
after Algeria, Nigeria, and Egypt, but gas has been neglected compared to oil,
given that only 17% of resources are exported and there may yet remain much more
to be discovered.
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ENERGY
Tatneft to start exploration drilling in Libya in 2007
Russian oil company Tatneft plans to start exploration drilling at the N82-4
contract zone in Libya next year, Tatneft deputy director general for foreign
economic activity, Khamit Kaveev, said, Interfax News Agency reported.
He said that a few days ago the country's government approved a program for
Tatneft to work at the block.
Tatneft and the National Oil Corporation of Libya signed a contract last
December for the exploration of the N82-4 block. Work will be carried out under
a production sharing agreement according to which the volume of oil to be split
amounts to 12 per cent of production.
The block is located in the central part of the country and covers an area of
2,000 square kilometres. Minimum exploration obligations require 2D and 3D
exploration work to be carried out, and also two exploration wells to be
drilled. Two exploration wells were previously drilled at the block, indicating
the presence of hydrocarbons.
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