Friday, 2 September 2011

In Talks on Rebuilding Libya, a Tussle for Contracts


PARIS—World leaders gathered here to show united support for the rebels who toppled Col. Moammar Gadhafi and to discuss how best they can help rebuild the North African country, but a rift emerged over who should get first access to Libya's oil and natural gas riches.
Col. Gadhafi, however, issued a reminder from hiding Thursday that the fight wasn't over yet. He said tribes loyal to him were armed and preparing for battle.
The rebels now say pro-Gadhafi tribes in the longtime Libyan leader's hometown of Sirte have until Sept. 10 to accept a cease-fire and peace deal or face an assault on their city.
Col. Gadhafi's audio statement, broadcast by Syrian-based Al-Rai TV, came as the rebels said they were closing in on the former dictator.
"We won't surrender again; we aren't women, we will keep fighting," Col. Gadhafi said. His voice was recognizable, and Al-Rai has previously broadcast several statements by Col. Gadhafi and his sons.
Opposition fighters, backed by North Atlantic Treaty Organization airstrikes, have been advancing toward three regime strongholds: Sirte; Bani Walid, 86 miles southeast of Tripoli; and Sebha, in the southern desert. There has been speculation that Col. Gadhafi is hiding in one of those three towns.
At the "friends of Libya" conference in Paris, representatives of 63 countries and institutions said they were anxious to avoid the pitfalls of Iraq, where a U.S.-led coalition succeeded failed to forge national reconciliation and unity after driving Saddam Hussein from power.
"We urged [Libya's interim government] to begin a process of reconciliation and forgiveness to ensure we learn from mistakes made in other countries," France's President Nicolas Sarkozy said at a joint news conference with U.K. Prime Minister David Cameron and Mustafa Abdel Jalil, who leads the Libyan rebels' National Transitional Council.
Agence France-Presse/Getty Images
U.S. Secretary of State Hillary Rodham Clinton meets with French President Nicolas Sarkozy at the Elysée Palace ahead of a Paris conference on Libya.
Divisions emerged, however, in the race for access to Libyan oil, between countries which took part in the foreign military intervention against forces of Col. Gadhafi and those, such as Russia and China, that didn't.
French Foreign Minister Alain Juppé said he thought it would only be reasonable if French companies benefited from preferential access to Libyan contracts given that Paris, together with the U.K., led the foreign military offensive in Libya.
"The NTC has said very publicly that, in the reconstruction effort, it would give preferential treatment to those who supported them," Mr. Juppé told French radio RTL. "That seems quite logical and fair."
France in March became the first country to recognize the NTC as the legitimate representative of the Libyan people.
Russia, which abstained when the United Nations Security Council passed its March resolution authorizing the use of force in Libya, has said the U.N., not a small group of countries, should take the lead in supporting Libya's reconstruction.
Libya is home to Africa's largest known oil reserves and, until the war, ranked as one of continent's biggest producers, with daily output of 1.6 million barrels. But output slowed to a trickle and exports halted completely as the violence intensified. Analysts say it may take 12 to 18 months for Libya to get back to the production levels seen before the conflict broke out in February.

Libya's Revolution

Alexandre Meneghini/Associated Press
People in the rebel-held town of Benghazi celebrated the news Aug. 22 of the capture of Moammar Gadhafi's son Seif al-Islam.

The Fight for Tripoli

On Edge in Libya

Track fighting and city control around the country.

Map: Regional Upheaval

Track events day by day in the region.
Italy, the former colonial ruler in Libya, which played an active role in the foreign military intervention, has been off to a fast start to resume business activities in Libya. This week, Italy's Eni SpA, the largest foreign oil company in Libya, signed an agreement with Libya's interim government to supply natural gas and fuel for the immediate needs of the local population.
Eni Chief Executive Paolo Scaroni said in an interview that Libya's new government will respect all existing oil contracts and that oil output should return to precrisis levels by the end of 2012.
Messrs. Sarkozy and Cameron said all participants in Thursday's conference had agreed to rapidly hand back to Tripoli the billions of dollars in Libyan assets that were frozen in February in response to Col. Gadhafi's crackdown against anti-government protesters.
To do this, the U.N. must pass a resolution to cancel the February sanctions. In the meantime, countries present have effectively unfrozen about $15 billion in Libyan assets to help the interim government finance emergency needs, Mr. Sarkozy said.
For its part, the U.S. said it had worked to unfreeze $1.5 billion, half of which has already been available to the help the NTC.
"It must be clear to Libyans and to the world that this money is being used to serve the Libyan people," Secretary of State Hillary Clinton said after the conference.
Agence France-Presse/Getty Images
Hillary Clinton with Libyan officials Mustafa Abdel Jalil, center, and Mahmoud Jibril in Paris Thursday.
While Col. Gadhafi's whereabouts weren't known Thursday—42 years to the day since his September 1969 coup—Mr. Cameron said the foreign coalition would continue military operations to help defeat the last strongholds of Gadhafi loyalists.
"We welcome this support," said Mr. Jalil, the NTC chairman. NTC Prime Minister Mahmoud Jibril also attended the conference.
U.N. Secretary-General Ban Ki-moon, who also attended the conference, said his most immediate challenge would be to respond to Libya's humanitarian crisis.
In the longer term, he said the NTC had asked for U.N. support to set up a judicial system and a police force, organize general elections and draft a new constitution.
"We look for prompt action on our mandate," he said.
—Guy Chazan, Stacy Meichtry
and Max Colchester
contributed to this article.
Write to David Gauthier-Villars atDavid.Gauthier-Villars@wsj.com
Corrections & Amplifications
Libya's prewar oil output was 1.6 million barrels a day. An earlier version of this article incorrectly said daily output was 1.6 billion barrels.