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Libya Probes Oil Contracts under Gaddafi

Libya Probes Oil Contracts under Gaddafi

For foreign oil companies in Libya: FACTBOX; Looking at influence of Gaddafi son Saif al-Islam; Probe widely expected

April 10, 2012 9:33 by



Libya has started investigating foreign oil companies over their past relationships with the former Muammar Gaddafi government, an investigator with the ruling National Transitional Council (NTC) said on Monday.

Salem Qanan, who sits on the NTC’s Oil Committee, said the government had requested documents from Libya’s National Oil Corporation (NOC), which is in charge of contracts between private companies and the state.

Qanan said his committee had received information from people who had worked in the energy sector during Gaddafi’s rule that led it to believe there was reason to suspect the contracts agreed during that time.

“There are some suspicions over some contracts that were made by the NOC and foreign companies which seem to have been influenced by Saif al-Islam Gaddafi,” he told Reuters on Monday.

Saif al-Islam is one of the sons of the former Libyan leader, who is in detention inLibya and wanted for trial both by the Libyan authorities and the International Criminal Court.

Educated at the London School of Economics, Saif al-Islam and his aides were an important point of contact in Libya for many Western governments and companies.

During Gaddafi’s four decades of rule, many of the world’s majors either operated inLibya or signed oil deals with Tripoli.

In October, Libya pledged a probe of Gaddafi-era oil deals. Analysts said the investigation had the potential to spread panic among foreign players and even delay the return to normal oil output. NTC spokesman Mohammed al-Harizy said that the investigations had begun this week.

“The investigation is part of due diligence and a routine process to make sure there were no irregularities either with the old regime or the new one,” NOC marketing manager Ahmed Shawki told Reuters.

Industry sources have long expected a wide-scale probe of oil deals by the new rulers in Libya, who are under pressure to root out any graft from the Gaddafi era.

“With due respect to former contracts, the government needs to make sure that these contracts are free from any suspicion and are transparent,” Harizy told Reuters.

Uncertainty about the contracts is likely to delay the oil industry’s return to normal in the post-Gaddafi era.

A byproduct of the investigation, industry sources say, could be that some old contracts are reallocated to reward countries that strongly supported last year’s uprising, which ended Gaddafi’s 42-year rule.

Libya’s deputy oil minister Omar Shakmak told Reuters that the NTC would refer the results of the investigation to the prosecutor general’s office to make its necessary investigations if there is foul play.

The Wall Street Journal reported on Sunday that the Libyan general prosecutor’s office was investigating foreign and domestic oil companies over their past operations in Libya.

The prosecutor’s office could not immediately be reached for comment on Monday.



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