The United States Will Take Libya’s Oil and Gas by Force

Sergei Balmasov
New Eastern Outlook

"It is possible that now, after 40-odd years, the United States and Great Britain intend to put things back to the way they were before 1969."

According to statements made in Washington, the idea of a military intervention in Libya is being discussed. A NATO strike group with American and British troops at its heart is already drawing close to the shores of that country. The US representative to the UN Susan Rice is openly saying that the Pentagon is currently discussing details of an upcoming operation with its NATO allies.

“Peacekeeper” Obama’s arguments in favor of aggression are simple: Gadhafi is unjustifiably employing military force against peaceful demonstrators. We can tell what kind of peaceful demonstrators he is talking about from videos broadcast by Western news media that time and again show heavily armed opposition members.

Military intervention in Libyan affairs could become a reality within the next few days. The Pentagon has acknowledged that it has sent the aircraft carrier Enterprise to Libya from the shores of Somalia, and it will reach its destination within a day’s time. Referencing its Defense Department sources, Fox News reports that the Pentagon intends to send an additional Marine battalion to take part in the upcoming operation.

British Prime Minister David Cameron was one of the first to call for aggressive action against Libya. He said the world public cannot overlook what is happening in Libya.

These preparations were no surprise to Gadhafi. A week ago, when just as the orchestrated uprising against him was gathering force, he railed against Great Britain, whose warships had “suddenly” arrived off Libya’s shores, for preparing aggressive actions against his country.

At the time, however, the British were only showing support for the opposition, as though to say, beat the mad dog; we’ll lend a hand!

However, old man Gadhafi turned out to be a tough nut for the West to crack. The opposition has been unable to overthrow him using their own forces despite support provided by the “big guns” of the Western media, which unleashed a real psychological war against the Colonel.

The tens of millions of dollars that the CIA and MI6 invested to organize the coup have only yielded a partial success. The opposition has seized control of just the eastern part of the country. And even the Western propagandists have been forced to admit that things are not going well for the opposition.

We had reports only yesterday that the rebels are beginning to storm the capital of Tripoli and occupy its suburbs. And on the morning of March 1, Western TV channels showed video from Benghazi, where they had just succeeded in repelling an attack by Gadhafi’s mercenary thugs.

The Colonel got an unexpected boost from a few hundred Belarusian spetsnaz soldiers sent to him from Minsk. Reports by Western propagandists are alarmed that with their help the “mad dog” is ready to tear into the revolutionaries. So it was time to save the Libyan democracy that had miraculously emerged.

The West had a plan ready that boiled down to the time-tested democratic method: “We’ll do you a kindness on the wings of Tomahawks.” The plan was put into action in December 2010 and January 2011, when the uprisings started in Tunisia and Egypt, with Libya caught in between. Gadhafi’s turn came after the regimes of Ben Ali and Mubarak fell.

As for Gadhafi, we have to admire what he is doing. In contrast to neighboring Tunisian leader Ben Ali, this Bedouin warrior decided to fight to the end with gun in hand. Against those who want to get their hands on Libya’s wealth. What more does the West need? Oil and gas flow faithfully from Libya to Western countries. However, few people know exactly how that works, and in what form and at what price it is done.

Doctor of Political Science Maxim Bratersky from the Higher School of Economics told Pravda.Ru in an interview that “oil production works the same everywhere in the world. Transnational corporations monopolize the market. Therefore, the leaders in oil-producing countries frequently hire foreign subcontractors to do the work. As far as Libya itself is concerned, many foreign companies working in its market preferred to keep the details of their deals with Gadhafi secret.

Still, based on available sources, we can assume that their average profit margin was about 9%. That means a foreign company would invest $1 billion and it would take 10 years before they could expect to recover their investment and start making a profit.

Now that there is more competition, almost no one remembers the fabulous profits that foreign companies made from oil a half-century ago in Iran and Saudi Arabia. This is how they worked it: “We pay your treasury $1 billion every year and produce as much oil as we want, and you don’t interfere.”

Could someone perhaps have wanted to operate in Libya under the old system? Even if we disregard gas, the Libyan “pie” looks very tasty. The fact is that production costs here are no higher than two dollars per barrel of oil. In addition, Libyan oil commands particularly high prices on the world market because of its special qualities. Annual oil production in Libya is 77 million tonnes. In 2009, total revenues came to $31.5 billion. With the price per barrel now double what it was in 2009, the revenues from operation of Libyan oil fields have become simply fantastic.

Let’s take a look at how the Libyan oil that leaves the country is proportioned out. According to 2009 data, Italy bought almost a third of all Libyan oil (32%). Germany came in second (13.4%); France and China tied for third place (10% each); and Spain brought up fourth place (8.6%). Other European countries got 13% (Serbia, Great Britain, the Netherlands, Austria, Portugal, Ireland, Greece, Sweden and the Czech Republic).

The Americans received only 6% of Libya’s oil. The remaining 4% went to India, Malaysia and Singapore.

Thus, the United States and Great Britain together received less than 10% of the oil produced in Libya. In 1969, American and British companies owned the lion’s share of the oil produced in the country. Gadhafi expelled Westerners after winning the Libyan revolution (the sole exception being the clever Mr. Hammer); he opened up to Americans and the British only in 2004, and they had to be satisfied with less.

It is possible that now, after 40-odd years, the United States and Great Britain intend to put things back to the way they were before 1969. We can only speculate how that might be done. But one thing is clear: pro-Western forces will let transnational corporations have the country's oil and gas riches cheaper than Gadhafi did. In any event, if the Colonel is overthrown, some people here will have to make room.

However, the ideas of a “peaceful government” that have taken root in Washington may not pan out. By removing Gadhafi they are opening a Pandora’s Box and unleashing the Islamists. We can only guess what kind of monster they are prepared to install in place of Gadhafi.

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URL: http://www.a-w-i-p.com/index.php/2011/04/05/the-united-states-will-take-libya-s-oil