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Crude oil and chaos

Wingard, Jessie
June 25, 2012

As Libyans head to elections on July 7, the country faces numerous economic and political problems, including militias and a weak government. But oil production is back up and in Libya, oil is king.

A security guard stands at at a gate inside the Zawiya Oil Refinery
Image: dapd

The Zawiya Oil Refinery, about 45 miles (72 kilometers) west of Tripoli, is Libya's second largest refinery, and Khalifa Sahli, the refinery's operations manager, said with a smile that the facility's production was at "102 percent."

Overall, crude production in Libya is almost back to pre-civil war levels. BP has resumed oil exploration work and oil shipments flow to Italy, France, Germany and other countries.

But Libya's political system is far from successful. Armed militias, once backed by NATO, now attack government offices and kidnap business executives. Some Libyans have said the on-going fighting could turn their country into another Afghanistan or Iraq.

Khalifa Sahli, Zawiya oil factory
Operations manager Sahli is pleased with increased oil productionImage: DW

Elhabib Alamin, a well-known poet and official with the Ministry of Culture, said he fears Western powers will abandon Libya's struggle for democracy.

"The wars in Afghanistan and Iraq didn't result in improvements for the people of those countries," he said. "I think some leaders here in Libya are trying to get Western backing to become the next Hamid Karzai. I don't want Libya to become an ATM for Western oil companies while they abandon the people of the country."

Corruption tied to foreign companies

Foreign oil companies are a sore spot for Libyans because of the country's long history of corruption. Ibrahim Ali, chair of the NGO Libyan Transparency Association, told DW that the old regime were thieves. Oil would be sold at world market rates, but European companies actually bought the crude at much lower prices. He said the corporations and Gaddafi cronies pocketed the difference.

"They kept the difference for themselves through an outside commission," he said. "It's still that way today but few people know about it."

Ali and other NGO activists have demanded that the government publish the oil contracts, along with a detailed budget of how the Libyan government spends its current oil revenues.

Ships are at anchors in the Mediterranean sea next to the Zawiya Oil Refinery
Oil shipments are on the rise again in LibyaImage: dapd

But the oil industry has strongly objected. Ibrahim Layas, an official with MedcoEnergi Oil and Gas, said foreign oil companies do not want to publish contract terms because one company may be getting a more advantageous deal.

Layas said the contracts are strictly confidential: "You don't want the other companies to see it. You don't want the public to see it."

Public will demand transparency

Alamin said the oil companies will have to reveal their contracts sooner or later because people are demanding a new level of transparency from their government.

"Someday it will come out," he said. "If it's secret, the Libyan people will be very angry at the government."

Elhabib Alamin
Writer and political activist Alamin is wary of Western interestsImage: DW

At a demonstration in the city of Benghazi, protestors demanded an end to corruption and dissolving the militias. They said they looked forward to elections for a National Assembly in July. The Assembly will choose a new government and be responsible for writing a new Constitution.

But protestor Abdul Wahab said a new government will probably not resolve the issues of corruption and militias.

"This disorganization and chaos will have to carry on for some years before we establish a firm nation, a nation with a constitution that everyone adheres to," Wahab said.

Wahab added that Libyans worry the continuing political chaos could produce a new dictator "a new strongman using his own militia to impose his will on the Libyan people."

Author: Reese Erlich, Tripoli / db

Editor: Sean Sinico