Tuesday, February 24, 2015

the battle for libya's oil


aljazeera |  Oil is the lifeblood of the Libyan economy. Prior to the 2011 revolution that toppled Muammar Gaddafi, Libya produced some 1.6 million barrels a day, exported mostly to Italy, Germany, Spain, and France. Natural gas and oil revenues made up nearly 96% of government revenue, propping up a vast public sector and providing millions of Libyans with their main source of income.

When a revolution backed by NATO air strikes brought Gaddafi’s regime to a bloody end in the summer of 2011, output plummeted to zero. To the surprise of many analysts, it quickly recovered, reaching 1.4 million barrels per day, almost hitting pre-revolution levels. But that figure belied growing political divides that would soon bring the oil industry - and Libya’s economy - to its knees.

As the coalition that brought down Gaddafi started to fragment, local grievances over the distribution of oil revenues led to protests, closing down oil fields, pipelines and loading ports. In the east, a rebel leader charged with protecting the oil infrastructure seized control of several ports, demanding greater autonomy and a bigger share of oil revenues for his region.

His attempts to sell oil internationally without the government’s consent were only thwarted when US navy commandos stormed a tanker trying to take oil out of the country. Meanwhile, a militia in the west shut down two of the country’s most important oil fields, and insecurity grew. International oil companies fled as security deteriorated.