Say what you like about the Colonel with the randomly-spelled name, he was one of a kind. Psychopathic lunatics are a dime a dozen. But nobody had the Colonel’s dress sense and flamboyance. He also wrote at least one book that deserves bestseller status for entertainment value. Of course, it is easier to eulogise him from a distance. The people who suffered his murderous whims found him less than endearing.
The chilling video of the Libyan leader’s last moments has been viewed by millions. I suppose it will help bring closure to one chapter of the Arab Spring. The understated website of the Libyan oil ministry is much less popular. But it’s far more worthy of eyeballs.
There is a bald announcement: “Due to the prevailing situation in Libya, the scheduled Oil & Gas Libya exhibition has been rescheduled from October 2011 to take place in the first quarter of 2012. The Organisers are now in consultation with the Libyan National Transitional Council (NTC) with a view to staging this event under the patronage of the appropriate new ministry responsible for Libya’s energy sector.”
To paraphrase a popular TV anchor, the world would love to know exactly who will be running the appropriate new ministry. That is really why Libya is newsworthy, although all the right noises are being made about respect for human rights, the victory of democracy and so on.
The NTC will be courted, and feted, even if it indulges in mass executions. There have been reports of mass rapes and human rights violations for months. It doesn’t matter. The NTC is now in charge of the largest oil and natural gas reserves in Africa.
In February, before the civil war, Libya was producing 1.6 million barrels a day (mbpd), a little less than its rated capacity of 1.8 million barrels. It contributed two per cent of global exports. That oil is prized in Europe because it is light, sweet crude, which can be refined at low cost.
During the war, production dropped to a low of 100,000 barrels per day (bpd). The NTC was lucky in that it gained control of the oil-bearing region and operational assets. Production is now at 400,000 bpd. The gas pipeline to Italy is operating again.
The prospect of Libyan energy supply returning might make a huge difference to prices, which spiked along with the Arab Spring. Lower energy costs cannot be bad for a global economy reeling in the face of low overall demand.
There will obviously be a review of whatever agreements the Colonel had in place. He did deals in his own way; the NTC will probably do things differently. Putting the infrastructure back in order and regaining pre-war production levels will take months. It’s barely possible the enthusiastic Nato support for the NTC was driven by hopes that the victors will reward their allies by letting them get in on the ground floor, when it comes to reconstruction and production-sharing contracts.
Libya’s future could pan out in many ways. It’s a tribal nation, with divides between various Arab clans and assorted North Africans. It could end up in a simmering civil war like Iraq. It could be unified via Islam and turned into a mullah-driven republic. It may even become a moderate proto-democracy. Each of those scenarios would be accompanied by varying amounts of chaos and disorder. That will be reflected in crude price movements.
From an oil-importers’ perspective, there is one good thing about dealing with a dictator. It is an orderly madhouse and you only have to keep one lunatic happy. If Libya turns into a disorderly madhouse, where all the inmates want a piece of the only game in town, the NTC’s allies may end up wishing that they had played their cards differently.
