1/4/2005
Oil firms gush over Libya
Tripoli, (Libya), Jan. 3: For the first time in a decade, a new oil territory is opening up — or, rather, reopening. US oil executives have recently been flocking to Libya, crowding the lobby of Tripoli’s only luxury hotel and literally standing in line to meet local officials.
The executives are bent on finding out whether this oil-rich North African country — long walled off from foreign investment because of its anti-American stance and ties to terrorist organisations — could become the next frontier for exploration.
What the petroleum crowd is after lies hundreds of kilometres south of Tripoli, beneath a desert that holds oil reserves estimated at more than 36 billion barrels, enough to fulfil US daily imports for eight years.
That may be just a starting point. With oil around the world getting harder to come by, Libya is dangling the rights to explore and develop new sources of petroleum. It holds the largest oil reserves in Africa, and, as officials here point out, only a quarter of the country has been explored.
But that is where the problems start. Libya is an authoritarian state, with tangled bureaucracy, rampant corruption and arbitrary enforcement of laws. Its regime is based on an elaborate fusion of socialism and Islam — dubbed the Third Universal Theory — that was Muammar el-Qaddafi’s answer to both capitalism and communism after he took control in the late 1960s.
Such tribulations are nothing new for oil executives, many of whom have previously travelled to hostile and far-flung places in search of oil. They, along with other Americans, are certainly eager to do business here: the newly-opened US liaison office said it was receiving more than 200 enquiries a week from interested companies.
The surge in oil prices in 2004 turned the spotlight on the urgency to increase global supplies. But for oil companies that must continually replenish their production with new reserves, the exploration options are narrowing.
In West Asia, home to majority of the world’s known oil reserves, most countries remain shut to foreign investors. In the US and in the North Sea, production from mature fields is in decline. Even in Russia, considered by many to be the most promising energy supplier in the world, access is threatened as the government tightens its grip on the energy industry.