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article imageAfter Libyan conflict, race is on for Libyan oil

By Lynn Herrmann     Sep 3, 2011 in Politics
Tripoli - Libya is positioning itself as for an economic revival after recent social unrest is leading to an apparent regime change, with five international oil companies already back in the country, having resumed operations to get its oil into their pipelines.
Ahmed Hehani, Libya’s reconstruction minister in the interim government, stated this week foreign expertise is critical in resuming oil production in the war-torn country. “The issue of damage is not much and you can get procurement very fast. This is helped by the fact the producing wells are under contract to international firms, if they feel they can deploy their people,” Jehani told Reuters.
On Thursday, world leaders meeting at a high-level conference in Paris pledged to free Libyan assets previously frozen under UN sanctions. In addition to the oil companies resuming work, an unfreezing of the assets would help the interim government in its efforts to restore services and begin reconstruction.
“We are not seeking any bridge financing at the moment, we are after our own money,” Jehani added, Reuters reports.
Matan Vilnai, Israeli Minister for Home Front Defense, expressed pessimism over recent activities in Libya, stating late last month “the developments in Libya are not in Israel's interest in the short run, but they will be in its interest in the long run,” according to the Middle East Monitor. He suggested the Libyan Revolution is not connected to the Arab Spring, and is against establishment of a democratic system in Libya’s near future.
The race for Libyan oil is expected to ratchet, with France, Italy and the UK all dependent on it. The Economist reports Italy is the biggest importer of Libyan oil, some 376,000 barrels per day. France had been getting around 205,000 barrels per day before the conflict began.
Among the five companies back in Libya is ENI, Italy’s partly state-owned oil and gas company.
Libya’s National Transitional Council must be recognized by the IMF in order to receive aid from the African Development Bank and the World Bank, a move requiring the support of IMF’s 187 members.
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