TRIPOLI, Libya: Libya’s economic shambles has forced shop owners to pull down their shutters for good and Libyans to line up for bread. The departure of U.S oil companies could force further belt tightening among an already grumbling population.
Foreign diplomats and business men in Libya say the country’s economic problems are more of threat to Col. Moammar Gadhaf than U.S bombs.
“If Reagan really wanted to hi this country very badly, he could easily have done it without missiles,” said one West European diplomat. “Everything in these countries is American.”
President Reagan ordered out of Libya by June 30, five American companies pumping and mark eating Libyan oil — Occidental Petroleum, W.R. Grace, Amerads Hess, Conoco and Marathon — and six U.S oil service companies.
Reagan’s Jan. 7 executive order froze Libyan assets in the United States and ordered all American businesses and all Americans except journalists and spouses of Libyans to leave the country by Feb. 1. Reagan gave oil firm: special exemptions when they claimed immediate departure would leave their oil revenues and one billion dollar in assets, to Gadhafi.
Oil analysts say Libya has been pumping petroleum at a furious rate to rise as much as possible before the deadline. In Apnal Oil Company said production averaged 1.1 million bpd, Oil analysts said it hit as high as 1.4 million bpd on some days.
Oil analysts estimate U.S firm pumped about 40 percent of Libya’s old and provided it with 40 percent of its foreign earnings.
Diplomats estimate 800 Americans have remained in Libya, most of them illegally. They are seldom seen because they work on huge ‘oil camps in the desert, earning far more than they could back home.
National Oil Company Chairman, Abdullah Badri, said the departure of American companies would have no effect on the Libyan oil revenues.
“It will not affect us at all,” he said in his plush Tripoli office, “As far as our operations are concerned, we have been running it ourselves for the past three or four years”.
Industry analysts in Tripoli said the key will be whether Washington allows the American companies to keep marketing. If Libya can continue pumping its oil and the U.S companies market it, they see little change.
Should the United States cut that avenue, they say, Libya will have to market approximately 600,000 barrels of oil a day more than it is doing now. They say its marketing company, Brega International, is not set up to do that.
“Right now, Brega is marketing Libyan oil for domestic consumption and handling some barter deals,” one diplomat said. “If the U.S companies are barred from marketing Libyan oil…Libya will have to search out new markets”.
Gadhafi says he is unconcerned.
“We lived for 200 years without oil.
It insists on the OPEC price to customers who can buy barrels of crude at $14 on the spot market. The lowest Libya has gone is to offer Italy oil for $17 in partial payment of its $650 million debt. Rome said no the same day.
“They have their heads in the sand,” said a British oil expert who trains Libyan engineers. “Decisions are not being made. It is a disaster and no one seems to be doing anything about it”
Regardless of an American pullout, mismanagement and the plunge of oil prices have sent the economy into a crisis that could threaten Gadhafi’s revolution.
Libya relies on oil for 99 percent: of its income, Oil prices dropped from $30 in November to a current figure below $13 on the spot market.
In 1979, Libya earned $22 billion from its highly valued light Essider oil, Last year it earned $8 billion. This year it is expected to earn only about half as much.
The problems this has caused are visible in every aspect of daily life.
In the 1970’s, spiraling oil revenues put television sets into Bedouin tents, Today Libyans line up ‘outside butcher stores when there is a delivery of scarce meat for days,
During Ramadan, the Muslim month of daytime fasting, Tripoli residents had to line up for bread.
Article extracted from this publication >> July 4, 1986
