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Books on Libya
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Update No: 040 - (22/02/07)
'The AIDS for Dollars Programme' and the Cost
of Doing Business
Just as he has dispelled fears before, the son of Libyan leader Mu'ammar al
Qadhafi, Saif ul-Islam, said in a newspaper interview that Libya would not
execute the five Bulgarian nurses and a Palestinian doctor, whose death sentence
was upheld by the Libyan Supreme Court last January. "There will be no
executions... Libya is not Iraq," he said, referring to the recent
execution of former Iraqi president Saddam Hussein and two of his top aides.
Saif even told the Bulgarian daily 'Chasa' that the medics' sentences were
"unfair', offering a rare glimpse of what the Libyan leader himself must be
thinking about the matter, telling the paper "my father is also against the
executions." Saif al-Islam also assured the Bulgarian daily that a solution
would be found to release the medics and save the medical staff and satisfy the
families of the infected children. The Bulgarian government has welcomed Saif's
statements, which should help ease tensions between Libya and the West, which
intensified last December after the Libyan court upheld the death sentence. Saif
even hinted that Libya has already discussed a solution to the matter with
Germany and France.
However, as has been previously noted in Newnations' Libya updates, the problem
does not lie with the Libyan government as much as it does in the tribal nature
of Libyan society and fears of revolt in Benghazi, where the children were
infected. Therefore, the children's families are the ones who hold the fate of
the medics. Even if, as many suspect, the Libyan government will pardon the six
medics at the last minute through the High Judicial Council, Bulgaria, Libya,
and the EU will have to meet the demands of the infected children's families. To
ignore the families' demands implies risking unrest in Libya, troubling the
Qadhafi regime and the interest of the West, which looks to Libya as a secure
alternative for oil exploration to more wobbly sources in the Middle East and
Nigeria. Compensating the families contributing to the medical treatment of HIV
infected children in Libya could then be considered, by the West, to be just
another business expense.
The families have demanded 10 million euros per child in compensation from
Bulgaria which to pardon the nurses. In 2006, the European Union and Washington
created an international fund to give treatment, medicine and other aid to the
children and their families. Bulgaria has so far refused to pay any compensation
for the families, saying that to do so would be to concede that the medics are
guilty. The Qadhafi foundation, ran by Saif ul-Islam, is also trying to
negotiate an agreement with the families for compensation (doubtless trying to
bargain down the price to be paid per child). Clearly, the issue is no longer
about guilt. The families themselves are very likely aware that the six charged
medics are scapegoats, but they are not about to let the opportunity to make
some money, knowing very well that they have unprecedented power over their own
'Brother Leader of the Revolution' (as Qadhafi is known). Perhaps, it is the
Libyan leadership that is the true hostage in this situation.
Libya and Bulgaria have been in a war of words over the medics' trial which
intensified after their death sentence was upheld. However, Washington has
already welcomed Saif ul-Islam conciliatory statements and strong hints that the
demands of the children's families would have to be met. The resolution of the
case would open the way towards a full normalization of relations between the
United States and Libya. Although, the USA has renewed diplomatic relations with
Libya in 2006 (removing Libya from the list of terrorist sponsoring states last
April, the normalization process remains incomplete. Washington has not yet
appointed an ambassador to Tripoli and Condoleeza Rice has not yet visited
Tripoli. US officials say that will happen after the Bulgarian medics are
released.
Oil Developments: OPEC countries to Become More Important
Of course the reason for the West's interest in Libya is oil and New York's
main oil futures contract, light sweet crude for delivery in March, was quoted
at US$59.39 a barrel, which is 20% higher than it was last January, when it was
priced even below US$50 a barrel. While some blame the attacks of Nigerian
separatists (and some plain opportunists) against oil installations in the Niger
Delta, the arrival of a very cold winter in North America and the end of the
'inundation' effect to lower oil prices before the US Mid-Term elections have
also contributed to the increase. However, while the price of oil is still well
below last summer's very high price of US$78 a barrel, the International Energy
Agency (IEA) published its Mid Term Oil Market Report, which noted a marked
reduction in supply from non-OPEC countries, while OPEC members themselves have
also lowered production - though to a lesser extent. The drop of oil production
from non-OPEC members has been attributed to problems in Norway and Mexico,
which are believed to have recently surpassed their peak production capacity,
while Canada has yet to fully exploit the tar sands, because of the cost of
industrial development that they imply. As demand continues to increase, OPEC
countries, which supply roughly 30% of oil in the world, will play an ever more
important role. Libya, therefore, will no doubt continue to attract oil
companies from all over the world, as many of its resources are still believed
to be untapped. Libya's attraction also relies on its stability, making it a
more reliable source (politically) than Iran, Iraq, Venezuela and Nigeria. So
the Middle East and North Africa may become even more important long-term oil
suppliers.
Accordingly, Libya wants foreign investors to help upgrade its refineries. The
hopeful signs of a resolution to the Benghazi HIV medics' trial, described
above, should facilitate investment. The NOC chairman, Shukry Ghanem said that
the cost of upgrading Libyan refineries would be no less than USD 8 billion. A
Libyan newspaper, al-Jamahiriya, quoted Ghanem as saying that the refineries
must be overhauled after the years of neglect when the country was under
international sanctions. NOC refines some 380,000 bpd of crude in its
refineries, 60% of which products are exported to Europe according to the US
government Energy Information Administration. Libya has five refineries, limited
to the hydro-skimming variety, the biggest of which is located in Ras Lanuf with
a capacity of 220,000 bpd. In the same interview, Ghanem hinted that Libya plans
to open a round of gas exploration and that NOC is currently studying the
projected areas of development. No doubt European uncertainties over gas
supplies from Russia have prompted Libya's interest to meet the growing
international demand for natural gas. There have been recent developments with
liquefied natural gas as well, which will be available for international
companies to develop industrially. Interestingly, Ghanem wants to see greater
Libyan participation in these developments and hinted that NOC is considering
raising the oil sector salaries to help retain staff, who might otherwise be
tempted to join foreign counterparts. Ghanem said "The GPC (General Peoples
Congress or parliament) will very soon approve a new financial Resolution,
providing for a better salary schedule and encouraging incentives". As part
of its gas developments, Libya expects to build oil and gas pipelines to Tunisia
as well as an oil refinery in the port town of Skhirat, some 250 km. south of
Tunis. Libyan and Tunisian private investors - as well as other international
players - have been invited to participate in these projects.
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