Firms beat path to ... Libya
A Libyan official said this week he expected oil firms to help normalize US ties.
It's not unusual for the five-star Corinthia Bab Africa Hotel which towers above this city's waterfront to be completely booked, many of its 299 rooms filled with foreign oil tycoons eager to tap into the country's untold reserves.
After more than 20 years as a global pariah, Libya is coming out of isolation. Most international sanctions have been lifted since its enigmatic leader, Col. Muammar Qaddafi, abandoned his weapons program, renounced terrorism, and accepted responsibility for the 1988 bombing of Pan Am Flight 103, compensating the victims' families.
"With the end of the Lockerbie issue, relations returned to normal and there were many delegations of Congress who visited Libya. I think all efforts are heading towards ending animosity," Colonel Qaddafi said in an interview with the United States-funded Arabic TV channel Al-Hurra last week.
Now, the companies that helped create Libya's oil industry in the 1970s are returning as Qaddafi rebuilds bridges to the West that he burned long ago, and this may help to precipitate political, as well as economic, change.
In a major step, ExxonMobil, the world's largest publicly traded oil company, signed an exploration and production deal with Libya last month. Marathon, Amerada Hess, and ConocoPhilips who together form the Oasis group also negotiated their return at the end of December since being forced out by sanctions in the mid-1980s, while Occidental returned in August last year. The Oasis group was producing 400,000 barrels of oil per day before it pulled out.
Indeed, the country suffered severely from the economic sanctions that were imposed by the US in 1986 after Libya was blamed for the bombing of a Berlin disco that killed two American servicemen. The consequence included a sharp decline in oil production, which fell to around 1.4 million barrels per day in the 1990s, from peak production of 3.3 million barrels per day in 1979. Output at the country's dilapidated liquefied natural gas plant, built by ExxonMobil in the late 1960s, has fallen to just 15 percent of capacity. Unemployment rose to about 30 percent.