Sunday, March 27, 2011

Treasury's Oil Flexibility on Libya

The U.S. Treasury sanctioned Libya's National Oil Corporation.  In doing so it left open the door:

Treasury will continue monitoring the National Oil Corporation’s operations in Libya.  Should National Oil Corporation subsidiaries or facilities come under different ownership and control, Treasury may consider authorizing dealings with such entities.

Bloomberg reported: on a deft group of rebels, acting only two days after the UN Security Council adopted a resolution on March 17 that froze the foreign assets of the Libyan National Oil Corp. and the Central Bank of Libya:

Libyan rebels in Benghazi said they have created a new national oil company to replace the corporation controlled by leader Muammar Qaddafi whose assets were frozen by the United Nations Security Council.

The Transitional National Council released a statement announcing the decision made at a March 19 meeting to establish the ‘Libyan Oil Company as supervisory authority on oil production and policies in the country, based temporarily in Benghazi, and the appointment of an interim director general" of the company.

The Council also said it "designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi..
According to Professor Peter Dale Scott, it gets  more intriguing:
Americans, Britons and the French are finding themselves as comrades in arms with the rebel Islamic Fighting Group, the most radical element in the Al Qaeda network [to bring down Gaddhafi]. Secretary of State Hillary Clinton admitted the risks of the unholy alliance in a congressional hearing, saying that the Libyan opposition is probably more anti-American than Muammar Gaddhafi.
The chess game is on, only real lives are at stake.

Update: Forbes stated Colonel Gadhafi threatened to nationalize foreign oil company assets in Libya at a Georgetown University speech in 2009.(Thanks to Economic Policy Journal)

Update 3-28-11:  Rebels are in active discussion to have oil sanctions lifted (from Reuters via EPJ)  If global interventionists drop pallets of cash in rebel controlled areas, what's to keep it from landing in Al Qaeda's hands?  While the U.S. Treasury and Hillary Clinton meet with Libyan opposition, the Pentagon has no clue as to who the opposition is.

Update 12-4-12:  Libyan oil fever fades.  Might this lack of interest get Western companies more advantageous deals?