With this week's announcement that further hard bargaining is expected between Libya and western oil companies over oil prices, it seems a good time to examine the policies being forged by the Libyan leader, Colonel Gaddafi, and the country's revolutionary council.
With this week's announcement that further hard bargaining is expected between Libya and western oil companies over oil prices, it seems a good time to examine the policies being forged by the Libyan leader, Colonel Gaddafi, and the country's revolutionary council. Using, library film shot during the lat year, we also take a look at Libya's all important oil industry.
Libya holds a strong hand in future bargaining. Though only developed during the last 10 years, the country's oilfields produce high grade oil on which Western Europe heavily depends. Britain, for example, is estimated to acquire a quarter of total oil supplies from Libya.
Unlike the Arab Gulf States, which recently concluded a new deal with oil companies, Libya has so far refused to negotiate with Western companies en bloc. Colonel Gaddafi's government regards oil as a long-term passport to development and economic dependence. Besides increased prices, it is demanding an unspecified amount of company profits for reinvestment in Libya.
SYNOPSIS: Libyan forces parade through the streets of Tripoli celebrating the anniversary of the 1969 military coup which brought Colonel Muammar Gaddafi to power, at the head of a revolutionary council of twelve young army officers. Only twenty-seven when he deposed King Idris, Colonel Gaddafi has worked steadily in the cause of Arab nationalism, reacting strongly against colonial influences.
Libya's new policies are financed in the traditional Middle East manner - by oil revenue. Soviet-built armoured cars, tanks and other military equipment were acquired with the proceeds from oil sales. As mistress of her own destiny, Gaddafi's Libya has ousted American and British military bases confiscated property from the large Italian community, and nullified French influence. And these same western countries are now worried by the threatened disruption of oil supplies from Libya in the continuing wrangle over prices.
The vast reserves of high grade oil in Libya have only been fully exploited in the last decade. There are now thirty-five oil companies operating in forty oil fields. Yet while demands for oil are growing, Libya's last year cut production, both to conserve resources and as a show of strength to oil-hungry foreign countries. Clearly, Colonel Gaddafi sees oil as Libya's passport to future development and long-term economic independence. Libyans have now started to market oil themselves -- much to the alarm of foreign companies, who fear they may be expelled from the country like other foreign interests. And now, in another show of strength, Libya is taking a tough line with Western oil companies by demanding substantial price increases.
In recent years, oil-rich Libya has been increasingly aiding Egypt. Last year Colonel Gaddafi flew to Cairo to cement relations with Egypt's President Sadat and the Sudanese leader, General Nimeiry, by forming a full federation to align political, military and economic policies. In general terms, since the death of President his successor, President Sadat, has taken a middle of the road course, General Nimeiry has emerged as the Arab world's chief mediator, while Colonel Gaddafi has taken a more extreme role. As the Jarring talks between Israel and Egypt continued, the Libyan leader called dogmatically for "no peace, no recognition of Israel". He may be as uncompromising in his attitude towards oil concessions. The Arab Gulf States were not thought serious in their threat to cut off oil supplies to the West. But Colonel Gaddafi might just do this unless price increases - of a rumoured twenty-five per cent -- are agreed. Some hard bargaining is about to begin.