A crude Nato victory

A crude Nato victory

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In my last post on this blog, I questioned the real motive behind Nato’s bombardment of pro-Gaddafi positions in Libya, wondering if the motivation was really humanitarian as the western propaganda machine would have us believe. Now the end-game is here. Their Transitional National Council (TNC) puppets have moved from their Benghazi stronghold to Tripoli. The rebel troops have laid siege to Gaddafi’s hometown, Sirte, hoping to smoke him out (if he is there, that is) and bring their putsch to an end.

While many Libyans are celebrating, the whole process of Gaddafi’s overthrow must be put in a proper perspective. It must be noted that unlike the ousting of Mubarak in Egypt and Ben Ali in Tunisia, victory for the Libyan people is actually a victory for Nato. The initial uprising in Benghazi was certainly threatened by Gaddafi’s counter-offensive, but this could have been defended by mass popular defence alongside a revolutionary appeal to workers, youth and the poor in the rest of Libya. But the self-appointed leadership in Benghazi preferred to appeal to the west, which seized the opportunity to step in, justifying their intervention on ‘humanitarian’ grounds. In fact, Nato’s intervention was based on a cynical calculation.

Without Nato acting as the rebels’ air force, and without the weapons, organisation and training that Nato and some other countries like Qatar provided, Tripoli would not have fallen to the so-called rebels in the way it has. Even the capture of Gaddafi’s Bab al-Aziziyah compound in central Tripoli was only made possible by the massive bombardment and assault led by Qatari and other foreign special forces.

Some Nato leaders like France’s Sarkozy sought to gain advantages for themselves, with a general aim to establish a more reliable, pro-western regime in Tripoli, seize a greater share of Libya’s oil and gas wealth and, above all, intervene to seek to control the revolutions sweeping North Africa and the Middle East.

So now that the end-game is here, it’s time to share the booty. Long regarded as the jewel in the crown for the world’s oil industry, Libya holds more oil reserves than any other country in Africa with more than 40 billion barrels of the “black gold”. And the crude is the right kind of oil: light, sweet crude perfect for low-sulphur fuels desired in the modern world.

As soon as the news of rebels entering and capturing Gaddafi’s Bab al-Aziziyah residence began to spread, Italy’s largest oil company, Eni, did not waste time despatching a technical team to assist in the resumption of Libyan operations. Houston-based Marathon Oil Corporation too has had ‘preliminary discussions’ with rebels over the condition of facilities where it has interests, with the goal of restoring production.

The Libyan political tsunami is resulting in the realignment of players in the country’s oil industry with the emerging power arrangement already sending shivers down the spine of energy leaders in Russia and China. To the glee of western oil majors, China and Russia – until now the two major players in the country – are facing the prospect of being sidelined. They may now have to pay the price for their lukewarm stance towards the rebels. The two countries abstained from voting for the UN resolution backing military action against the Gaddafi regime.

This is underlined by rebel leader Mustafa Jalil’s statement that the TNC would favour governments which extended their support to the rebel movement over those which did not. ‘We don’t have a problem with western countries like the Italians, French and UK companies. But we may have some political issues with Russia, China and Brazil,’ Abdeljalil Mayouf, information manager at rebel oil firm Agoco, was reported as saying last month.

This obviously places China and Russia in a disadvantaged position and signals a potential setback for countries which resisted tough sanctions on Gaddafi or pressed for more talks. It promises to open the floodgates for European and US companies to capture billions of dollars worth of oil exploration and construction contracts in the new Libya, and without real competition from Beijing and Moscow.

‘We have lost Libya completely,’ Aram Shegunts of the Russia-Libya Business Council said last month. ‘Our companies will lose everything there because Nato will prevent them from doing business in Libya.’ Brazilian firms Petrobas and construction company Odebrecht were also big business in Libya. Now their position under the new Libya regime is also under a cloud.

Industry observers believe Eni and France’s Total would emerge as the big winners in post-war Libya due to their countries’ heavy support for the rebels at the expense of the Chinese and the Russians. Traditional Libyan friends who remained allied to Gaddafi, now face being elbowed out of the country’s prized assets. But some cynics will say ‘this is politics. Some win, some lose’.

However, energy is closely entwined with politics. Nato may have won this battle but I am not sure the war is over. It will continue on other fronts.

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