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The country, which we lost: Russia no longer shines oil Libya
Material posted: Publication date: 25-08-2011

The civil war in Libya seems to have entered its final stage. The regime of Muammar Gaddafi who rules with an iron hand ruled the country since 1969., living out their last days. In Tripoli, fierce fighting, the residence of Colonel looted NATO rather rubs his hands, and on the ruins – the complete triumph of democracy.

However, with the losers not only the regime of Muammar Gaddafi. A major geopolitical game (and only the naive believe now that Libya is purely an internal civil war) ends again in favor of Russia. The loss of a longtime ally in Africa will result in concrete economic damage, and the first victims here will be the Russian oil and gas company.

1. I won't ask you to stay

The international community, not waiting for the denouement, for the most part recognized the Libyan opposition new legitimate authority in the country. Russia has yet to officially do, but reluctantly was forced to declare its readiness to hold talks with the Transitional national Council (NTC) of Libya, recognizing it as one of the parties to the proceedings.

Moscow is not very pleased with the overthrow of Gaddafi (an old friend, as you know, better than two new ones), and the new authorities clearly understand this. Hardly came to power, the opposition will forgive the Kremlin for his support of the old regime, and in the first instance this will relate to existing and future oil contracts.

Before the war, Russian companies feel quite comfortable in Libya. In the country worked for giants such as Gazprom, "Gazprom Neft", "Tatneft" and the Russian Railways. Each of them has made a multimillion dollar investment in the development of the business, which now risks losing.

So, at "Tatneft" in Libya there are licenses for development of four plots in the area of the Ghadames and Sirte with a total area of 18 thousand sq m. the company has drilled an exploration well and full of extracted oil (about 55 tons per day).

"Gazprom Neft", in turn, planned to develop the Deposit Elephant. The Russian company had to purchase half of a share Italian ENI in the project for $ 163 million. and to get in the end exactly one third of the consortium participating in the development of the Libyan fields with reserves of 110 million tonnes of oil. However now these plans, seemingly, will not come true.

The current allies of the rebels – France, Britain and the US, rightly counting on the gratitude of their protégés in case of victory over Gaddafi and his forces. Officially, no one says, but the experience of Iraq, where after the war there occurred a redistribution of oil fields in favor of American companies, speaks for itself. From the Russian companies in Iraq have returned only LUKOIL, but in order to regain the "West Qurna-2", the company had to exert a lot of effort (and money).

2. Not only the bowels

The opposition recently announced that it plans to terminate existing oil contracts with foreign companies. However, perhaps there should not delude ourselves: the devil, as always, lies in the details, and in this case – the reservation of "oil contracts legally prisoners". It is easy to assume who without problems will pass the face control at the new power, but the duty will find corruption or any other reasons for termination.

But Libya to Russia, not only the depths of the friendship of Nations was much stronger commodity bundles. In particular, the Russian railway planned to build high-speed railway line Sirt - Benghazi 550 km length of the Contract was signed in 2008, and Russian Railways had already invested some funds into this project, whose fate now hung in the air.

And, of course, Russian arms makers lost a loyal market, not to mention prisoners (but never executed) contracts. So, the government of Gaddafi has ordered Russian anti-ship complexes at 600 million euros, as well as training aircraft Yak-130. Estimated Rosoboronexport, only sanctions of the UN security Council against the regime of the odious Colonel cost of the defense complex of the Russian Federation of 4 billion. Well, loss of profit after the closure of this market for Russia nobody even counted.

According to the head of the Russian-Libyan business Union Aram Seguenza, Russian companies will have to leave before the hospitable African country. "We have lost Libya completely. We get the green light, and if someone thinks differently, it's a lie," he said yesterday to Reuters.

3. When again will flow Libyan oil?

However, for the team "sveltely" Gaddafi, oil is still a priority. The problem with the authoritarian regime and there is were every second African Republic, but the Alliance moved their ships for some reason in oil-rich Libya.

In General, the oil question rose in full growth from the beginning of the unrest in Libya. Otherwise also could not be: when such events occur in a member country of OPEC, which produces 1.7 million barrels. of oil per day and with reserves of 46.4 billion barrels, this is directly reflected in the world market.

Although Libya accounts for only 2% of world production, even at this modest stream can be a very good earn: annual revenue from the country's oil was in times of peace 33 billion. For Africa money more than serious.

Ironically, it was Libya, which has always advocated limiting the production of oil (and maintaining prices at a high level), has become one of the main reasons for the recent growth in oil prices, putting one of the last services in Russia. With the beginning of the civil war the oil companies one after another have curtailed activity in the country: as a result, the production of Libyan oil has now dropped to a pathetic 60 thousand Barr. a day.

Now the main question that worries the world (and especially the Europeans, who mostly consumed the Libyan oil), when will Libya restore its oil production? History demonstrates that prolonged military conflicts in oil-producing countries (and the blitzkrieg months of protracted fights as you can get), this industry is rejected on decades ago.

Take Iraq, which was able to return to pre-war levels of production only four years after the American invasion 2003. However, again, looking to compare the current Iraqi oil production (2.7 million barrels./day) still 20% lower than in 1979, when the late Saddam Hussein came to power. The ensuing war with Iran and the U.S. "desert Storm" 1991. with sanctions and other punishments took their toll on the mining industry of the country.

Similar story in Iran. The Islamic revolution of 1979. in three years pushed oil production to 6 million barrels. up to 1 million barrels./day. The ensuing war with Iraq and other perturbations, inevitable sanctions and other problems and not allowed to enter the pre-revolutionary level. In the end, Iran is now barely increased its oil production to 4 million barrels.

So the restoration of Libya's oil flow – the question is not idle. Experts disagree. Someone thinks that the new government will be able to quickly raise oil production to previous levels thanks to a more open regime, others point to the war-ravaged infrastructure and the need for renewal of contracts the new government.

4. Who's next?

Success in Libya inspires Europe and the US to new achievements in the oil market, which is so unjustly went hostile to democratic values modes. On stage – not oil-less Syria, where the Assad regime has long been a bone in the throat of Washington. The scenario is similar: the people's riots, their brutal suppression of the "bloody regime", world public outrage, the impending sanctions from the UN and the embargo on buying Syrian oil.

If the same room will be and in this direction, then Russia will lose another traditional ally in the middle East. Friendship with countries that are declared outcasts in Washington and the developed countries, brings to Moscow a decent dividend – this is where the main flow of Russian arms and nuclear technology and other products that are sold sometimes for political reasons and sometimes out of desperation.

However, traditional markets inherited from the Soviet Union, with every year becoming less, and new to win still does not work: all the niches were dismantled back in the days when uncontested Soviet trade flourished behind the "iron curtain".

The only positive feature of all that is happening can only be considered the acceleration of oil prices: while the bombs fall on the territory of the countries - exporters of oil, the margin from domestic natural resource rents increases, allowing the Russian budget to meet their ends. Is it worth the lost spheres of influence, time will tell.




Tags: Russia , war , USA , NATO , Libya , Africa

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