Berlusconi neo-colonialism in Libya

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Libya’s opposition claims to be in control of most of Tripoli, but there are still reports of resistance by government loyalists. And while the battle continues, the carve-up of Libya’s vast oil riches is already in full swing.

­Drill to the heart of most modern wars and you will strike oil. Regardless of whether or not that saying is true, when it comes to Libya, oil is going to play a pivotal role in the country’s future.

“Here we have two very strong interests that meet. It is the Western interests to tap Libya’s oil, but also the rebels’ or the future Libyan government’s interests to restart selling oil as soon as possible, as this is the first source of revenue for the country. It was under Gaddafi and it will definitely be under Gaddafi’s successors,” journalist Fabrizio Maronta told RT.

No stranger to the concept of friends with benefits, Prime Minister Berlusconi has been quick to cozy up to the new transitional council inviting the public face of the group Mahmoud Jabril to Italy for talks.

Once Gaddafi’s closest European ally, when the NATO bombing campaign began back in April, Rome abruptly switched sides and began courting the rebels instead. Now the Italian Prime Minister made a promise to Libya’s opposition to release US$505 million in Libyan assets frozen in Italian banks.

Top of the agenda for Mahmoud Jabril’s visit is expected to be discussions about Italy’s lucrative energy contracts with Libya.

Before the war, almost a third of Italy’s daily energy needs were imported from Libya, and oil giant ENI was the largest foreign operator in Libya, with oil and gas contracts running until 2042 and 2047.

The Italian government has done all it can to safeguard these contracts. But Italy’s ability to maintain its previously close business ties with the country is by no means a given – in a post Gaddafi Libya, the future looks extremely uncertain and little is guaranteed.

By Marianne Arens:

Italy moves to secure its share of the booty in Libya

14 September 2011

Italy is not prepared to yield its traditional influence in Libya to its rivals. Italian business and political circles take for granted their right to decide on the future of the oil and gas wealth of the country’s former colony.

“Italy will be the first partner of Libya, as it always has been,” Foreign Minister Franco Frattini declared September 3 at an economic forum in Cernobbio on Lake Como. “Italy will always maintain its first place.”

At the same economic forum, Frattini announced the release of the first tranche of €500 million in frozen Libyan assets. By mid-September, the assets held by Italy are to be handed over to the imperialist-backed National Transitional Council (NTC).

Just a week earlier, Paolo Scaroni, the CEO of Italian energy giant ENI, traveled to Benghazi and reached an agreement with representatives of the NTC for ENI to reassume control over a gas pipeline and oil production in the regions of Misla and Sarir in the east of the country. In return, ENI will provide the so-called “rebels” with gasoline as well as technical assistance for oil production.

The agreement signed by both sides declares that ENI and the NTC will create the conditions for a rapid and complete reactivation of ENI’s activities in Libya and do everything necessary to resume operations of the Green Stream pipeline. October 15 is specified as the date for the renewal of gas transport through the 500-mile pipeline from the Mediterranean to Sicily.

In March 2011, prior to the launching of the US-NATO war, Libya was producing over half a million barrels of oil per day. During the war production came to a virtual standstill, slumping to 60,000 barrels per day.

Before the war, 85 percent of oil exports went to Europe. The lion’s share, about 30 percent, went to Italy.

After 2008, Italy had developed broad business relations with the Gaddafi clan. Libyan funds flowed not only to the energy company ENI and its gasoline brand Agip, but also to the Italian Unicredit bank, the carmaker Fiat, the defense group Finmeccanica, the Juventus football club and many other companies. ENI received 15 percent of its crude oil imports from Libya and the company produced 280,000 barrels per day of oil in the North African country up to the outbreak of the war.

On September 1, Italy reopened the doors of its embassy in Tripoli, which it had closed March 18. Like the French embassy, it had been looted and set on fire on May 1. France has also reopened its embassy, and Britain is about to do so.

Italy wants to secure access to Libyan oil and gas as rapidly as possible and outmaneuver its rivals. At the Paris Conference on September 1, there was already friction between “Libya’s friends” over the spoils of war. The NTC had apparently promised 35 percent of Libya’s future oil contracts to French President Nicolas Sarkozy.

Since then, the French oil company Total, the British-Dutch Shell Group and the Russian companies Gazprom and Tefnut have sought to secure major shares of the oil and natural gas in the country. Libya has the largest proven crude oil reserves in Africa.

The shares of oil companies with a significant presence in Libya have risen notably on European stock exchanges in recent days. ENI’s share price at one point rose by more than 5 percent, with other oil companies such as Total and Spain’s Repsol group also registering increases.

Since then, Italian politicians and business leaders have insisted on the Italian “prerogative” in Libya. “Rome must now assert its leadership in economic relations,” declares the web site of the Italian radio and TV station Rai.it. It complains that this prerogative “is being strongly challenged by Paris.”

On September 2, ENI President Giuseppe Recchi told the media that ENI has “a trade percentage of fourteen percent with Libya compared with just two percent for Total.” The Italian oil giant began its operations in Libya in 1959.

The Italian claim to Libya is not new. “Libya is Italian, no one will take it from us”—this was the slogan one hundred years ago when Italy attacked and annexed the North African territories of Cyrenaica and Tripolitania for the first time in the fall of 1911.

Between 1923 and 1932, Mussolini’s fascist regime expanded Italian interests in its Libyan colonies in a so-called “war of re-conquest.” Over 100,000 Libyans died due to hunger, pogroms, deportations and poison gas attacks. In North Africa, half a million people were massacred. The genocide ended only with the Italian defeat in 1943.

The colonial government expropriated the valuable lands along the coast and distributed them to Italian settlers. Up until the 1960s, the most fertile regions in the country were in the hands of Italian landowners.

After the war, Libya was placed under a UN mandate, with its leader, King Idris I, functioning as a British puppet. Following the discovery of oil reserves in the 1950s, mining rights in the country were awarded to global oil companies. This enabled the Italian state holding company ENI to control a large part of Libya’s oil resources at an early stage.

The fragility of the new Libyan regime was underscored by its announcement yesterday that it would remain in Benghazi until after the seizure of the remaining pro-Gaddafi strongholds: here.