Tuesday, February 22, 2011

Libyan Unrest - The deadly Civil War

Muammar Gaddafi
We all are hearing reports regarding the Egyptian and Tunisian led revolutoins, but whats more suprising is that Libya is no Egypt or Bahrain. Rulled by Muammar Gaddafi for over 41 years now, Libya has been a colloidal power of Italy, and had close ties and corporative agreements with them. Many of the Libyan state organizations and companies hold stakes in Italian Banks and Defence companies.

As reproted by Bloomberg The Libyan Investment Authority owned 2 percent of Finmeccanica SpA, Italy’s biggest defense company, as of Jan. 17, 2011, Italy’s market regulator Consob said on its website. Libya also owns 7.5 percent of Juventus soccer club.

Not just that, world's biggest oil and gas exploration company extracts more than 245,000 barrels a day of oil in Libya. Thus this oil led infusion has led to Libyan investments in Italy to become one of the biggest foreign investors in Italy. Libyan investors own 7.2 percent of UniCredit SpA, Italy’s biggest bank, including a 4 percent stake held by Libya’s central bank.

But all this is started to change due to the ongoing political clashes between the freeman and the government. A civil was as called by Gaddafi's son Seif al-Islam who also said that "his father would "fight until the last man, the last woman, the last bullet."

jENI and the Libyan National Oil Corp.
Many countries are sending in airplanes and fleets to secure their nationalists, including Canada, Japan, Italy and India. Mnay of Gaddafi's government officials have also resigned and have changed sides with the public, being part of the revolution. Local newspaper Quryna reported that Justice Minister Mustafa Mohamed Abud Al Jeleil had resigned in protest of "excessive use of force against unarmed protesters."

A group of Libyan Muslim scholars have also issued a fatwa, or a religious edict, urging all Muslims to join the protests against the Libyan leadership, according to Al-Jazeera TV. Meanwhile, cracks also opened in the Libyan diplomatic corps stationed abroad. The country's permanent representative to the Arab League, Abdel Moneim al-Honi, told Al-Jazeera that he had resigned to "join the revolution." He also said that he had "confirmed information" showing that the Libyan army chief "is now under house arrest." "We are not resigning ... We are representing the Libyan people, we do not belong to the Gaddafi regime," deputy head Ibrahim Dabbashi told reporters.

But this isnt it, now what are the financial implications to the whole Oil boomed sector. "The price for crude oil is up by five dollars per barrel, and most of the press is relating this rise to the tensions that are escalating as we speak," said Stephen Jones, the vice president of market services with Purvin & Gertz, an energy consultancy based in Houston, Texas.

“Unrest in the greater Middle East market-place is becoming a greater concern to global oil markets," Jones told Al Jazeera in a phone interview. The price of Brent crude hit $105 per barrel on Monday, and pushed as high as $108 in after-hours trading, levels not seen since September 2008. Other oil companies have started to wind down operations in Libya. BP Plc suspended exploration because of the worsening violence. Statoil ASA said it closed its office in Tripoli and RWE AG suspended operations.

OMV AG is withdrawing all non-essential staff from the country. The Vienna-based company produced 34,000 barrels a day in Libya in the first nine months 2010, its third-biggest production country after Romania and Austria. Libya is Eni’s largest source of oil and gas with 244,000 barrel of oil equivalents a day produced in 2009. Eni holds 8,951 square kilometres (3,500 square miles) of developed oil fields in the country, or about one fifth of the company’s total area, according to data on the company’s website. Libya produced an average of 1.6 million barrels a day in January, according to data compiled by Bloomberg. "The Italians have the most to lose," Zeihan said. "They get about one third of their oil and 10-15 per cent of their natural gas from Libya."

protesters in Libya
Now unless the international community is going to react to this issue, this revolt will become more deadly, it has already taken down 160 men and Gaddafi is in no mood to step down, although news were coming in that he had left tripolli, but this was a rumour and he is still there. Arab League needss to address this issue, Eurpoean and other countires are also trying to negotiate on this revolt, as this might bring down the oil rich region, citing the prices to furthure hike and making ENI a huge loss as their commercial papers that expire in 10 years time wont be of any use if this goes on.
Post a Comment