Wednesday, August 31, 2011

Libya: "Investment Surge Sparks Nationalist Rhetoric, Policies"

Robalini's Note: This cable from Wikileaks perhaps explains the motivations behind the not-so-completely covert operation this year in Libya better than any establishment piece...
The regime has made a point of putting companies on notice that "exploitative" behavior will not be tolerated. In his annual speech marking the founding of his regime, Libyan leader Muammar Qadhafi in 2006 said: "Oil companies are controlled by foreigners who have made millions from them -- now, Libyans must take their place to profit from this money." His son, Seif al-Islam al-Qadhafi, said in March 2007 that, "We will not tolerate a foreign company to make a profit at the expense of a Libyan citizen."

Beyond the rhetoric, there are other signs of growing resource nationalism. -- Some IOCs with local subsidiaries have been forced to adopt Libyan names this year, including TOTAL (now officially titled "Mabruk"), Repsol ("Akakoss"), ENI ("Mellita") and Veba ("Al-Hurruj"), although these names have yet to catch on. -- The Libyan National Oil Corporation (NOC) is currently in the process of reworking long-standing oil concessions with several different IOCs (Ref B), in an effort to wring more favorable terms. There is a growing concern in the IOC community that NOC, emboldened by soaring oil prices and the press of would-be suitors, will seek better terms on both concession and production-sharing agreements, even those signed very recently. -- Libyan labor laws have also been amended to "Libyanize" the economy in several key sectors, and IOCs are now being forced to hire untrained Libyan employees. The Libyan National Oil Company (NOC) has recently begun insisting that deputy general managers, finance managers and human resource managers in local offices of IOC's be Libyan.

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