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Books on Libya

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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