Neo-Colonial Libyan Oil Industry Remains Paralyzed

Damage from a car bomb explosion at the Swedish embassy in Benghazi, Libya on October 11, 2013. There was an attempted coup earlier in the week., a photo by Pan-African News Wire File Photos on Flickr.

December 20, 2013

Neo-Colonial Libyan Oil Industry Remains Paralyzed

Political tensions in Occupied Libya which have left the country paralyzed appear to be heading towards a showdown. Libya’s fractious rebel parliamentarians have given the country’s beleaguered United States-backed Prime Minister Ali Zeidan an ultimatum to resolve a dispute with wayward militias over the closure of vital eastern oil terminals politically, or use military force to get the oil flowing again.

Zeidan, who has been locked in a standoff with militias who have closed the oil terminals, has vacillated between offering optimistic predictions of resolving the dispute, and dire warnings of the financial dangers of the oil blockade. Analysts say in any case it’s unclear whether Zeidan has enough control over Libya’s fledgling security forces to force eastern militias to lift the blockades.

Last week, he announced the export terminals in the eastern Libyan towns of Ras Lanuf, Es Sider and Zueitina, which collectively account for 60 percent of Libya’s oil exports, would reopen after traditional elders brokered negotiations between blockade leaders and the government. But the ports have remained shuttered, dealing a severe political blow to onetime lawyer Zeidan.

The leader of the blockade, Ibrahim al-Jathran, who once oversaw the Petroleum Facilities Guard assigned to defend the facilities his supporters have blockaded since July, refused to reopen the key oil-exporting ports until the Tripoli government recognizes eastern Libya, known by federalists as Cyrenaica, as a semi-autonomous region. Al-Jathran has demanded also that Cyrenaica receives the lion share of Libyan oil revenue.

The continuation of the Libyan lockout prompted jitters on the oil market with oil futures fluctuating wildly. Last week, on Zeidan’s announcement that the ports would reopen, Brent crude futures fell back 2.5 percent. This week they gained as much as $1.97 to $110.80 a barrel on the London-based ICE Futures Europe exchange.

“International oil markets are apprehensive,” the U.S. political risk consultancy Stratfor observed in a note to clients, adding, “Tripoli still faces significant challenges in guaranteeing and protecting its energy industry.” The consultancy described al-Jathran as “an intractable adversary with a desire for embarrassing Prime Minister Zeidan and his government in Tripoli.”

Parliament moves against Zeidan

The ultimatum set by rebel lawmakers is being seen by some analysts as an ambush for Zeidan, who has been at loggerheads with the Libya’s parliament the General National Congress, or GNC, since militias managed briefly to abduct him in October. The prime minister accused political foes inside the GNC of being behind the kidnapping.

Libyan bourgeois commentator Hafed al-Ghwell, a World Bank adviser, argues the ultimatum given to Zeidan is part of “an active tug of war between the GNC and the government these days.”

Occupied Libya’s Oil Minister Abdelbari al-Arusi said earlier this month the country had lost more than $7 billion because of the blockades that began July 28, a devastating setback for Libya, which relies on oil exports for nearly all of its foreign revenues. He warned that Algerian and Nigerian producers are now securing Libya’s customers.

The British risk consultancy Oxford Analytica cautioned last week that a continued blockade could mean that Libya loses its status as a leading oil producer. “Libya’s position on the world oil market is slipping,” it said. Libya’s output has fallen from 1.4 million barrels a day before the massive bombing and war of regime-change that ousted Moammar Gadhafi and brutally lynched the Pan-African leader, to 210,000 barrels a day under the neo- colonial regime in Tripoli.

Blockade leader al-Jathran has laid down three conditions for reopening the terminals: an investigation into alleged illegal crude sales by corrupt government officials, the establishment of an independent committee to monitor crude exports, and more development projects for Cyrenaica. He and other federalism advocates in oil-rich eastern Libya announced in November the formation of their own regional administration.

A federal system was observed for most of the reign of King Idris, who ruled from 1951, after Italian "decolonization," until Gadhafi and the Revolutionary Command Council overthrew the monarchy in 1969. Counter-revolutionary Federalists say the central government in Tripoli should only control defense, central banking and foreign policy.

The blockade is adding to public disaffection with the rebel Zeidan government and disenchantment with the political process.

The country is due early next year to vote on a 60-member committee tasked with drafting a new constitution, but the December 15 deadline for registration has had to be put back by the country’s election commission because only 393,522 voters registered, a tenth of those eligible, and a massive drop from the nearly 2.7 million who registered to vote in the GNC elections 18 months ago.

“Zeidan’s government seems to be going nowhere, and it is very difficult to determine the degree of support he has among political groups and the public,” according to Karim Mezran, senior fellow with the Rafik Hariri Center for the Middle East at the US-based think tank the Atlantic Council.