http://www.juancole.com/2011/06/libya-not-a-war-for-oil.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+juancole%2Fymbn+%28Informed+Comment%29
Libya not a War for Oil<http://www.juancole.com/2011/06/libya-not-a-war-for-oil.html> Posted on 06/14/2011 by Juan The allegation out there in the blogosphere that the United Nations-authorized intervention in Libya was driven by Western oil companies is a non-starter. The argument is that Muammar Qaddafi was considered unreliable by American petroleum concerns, so they pushed to get rid of him. Nothing could be further from the truth. *Bloomberg details the big lobbying push by American oil companies on behalf of Qaddafi*<http://www.bloomberg.com/news/2011-06-14/qaddafi-coddled-by-u-s-oil-companies-whose-hearts-are-where-the-money-is.html>, to exempt him from civil claims in the US. The United States in any case did not spearhead the UN intervention. President Obama and Secretary of Defense Robert Gates, along with the Pentagon brass, considered the outbreak of the Libya war very unfortunate and clearly were only dragged into it kicking and screaming by Saudi Arabia, France and Britain. The Western country with the biggest oil stake in Libya, Italy, was very reluctant to join the war. Silvio Berlusconi says that he almost resigned when the war broke out, given his close relationship to Qaddafi. As for the UK, Tony Blair brought the BP CEO to Tripoli in 2007, and BP had struck deals for Libya oil worth billions, which this war can only delay. Not only is there no reason to think that petroleum companies urged war, the whole argument about UN and NATO motivations is irrelevant and sordid. By now it is clear that *Qaddafi planned to crush political dissidents in a massive and brutal way*<http://edition.cnn.com/2011/WORLD/africa/06/12/libya.war/>, and some estimates already suggest over 10,000 dead. If UN-authorized intervention could stop that looming massacre, then why does it matter so much what drove David Cameron to authorize it? An argument you sometimes here is that the new Transitional National Council in Benghazi will be pliant toward Western interests. But Qaddafi himself had come back in from the cold and all sorts of deals were being struck with him by Western powers.* Those who more or less support Qaddafi and wanted to let him roll tanks on civilian protesters has weaved itself into a pretzel with all these conspiracy theories, while conveniently managing to leave out of the account ordinary Libyans, so many of whom are willing to risk their lives to bring about the end of Qaddafis murderous and mercurial regime.* *----------------------* Qaddafi Coddled by U.S. Oil Companies Whose Hearts Are Where The Money Is By Judy Pasternak, Jim Snyder and Nicole Gaouette - Jun 13, 2011 9:01 PM PT - - - inShare <javascript:void(0);>10 - - More<http://www.bloomberg.com/news/2011-06-14/qaddafi-coddled-by-u-s-oil-companies-whose-hearts-are-where-the-money-is.html#share> - Business Exchange<http://bx.businessweek.com/api/add-article-to-bx.tn?url=http://www.bloomberg.com/news/2011-06-14/qaddafi-coddled-by-u-s-oil-companies-whose-hearts-are-where-the-money-is.html> - Buzz up!<http://buzz.yahoo.com/buzz?targetUrl=http://bloom.bg/mNZKhW&headline=Qaddafi%20Coddled%20by%20U.S.%20Oil%20Companies%20Whose%20Hearts%20Are%20Where%20The%20Money%20Is&summary=The%20week%20after%20U.S.%20oil%20executives%0Ain%20Libya%20received%20tongue-lashings%20from%20%20Muammar%20Qaddafi%20%20and%20one%0Aof%20his%20lieutenants%20in%20February%202008%2C%20%20Occidental%20Petroleum%20Corp%20.%0Ahired%20an%20additional%20lobbyist.&tags=news> - Digg<http://digg.com/submit?url=http://bloom.bg/mNZKhW&title=Qaddafi%20Coddled%20by%20U.S.%20Oil%20Companies%20Whose%20Hearts%20Are%20Where%20The%20Money%20Is&bodytext=The%20week%20after%20U.S.%20oil%20executives%0Ain%20Libya%20received%20tongue-lashings%20from%20%20Muammar%20Qaddafi%20%20and%20one%0Aof%20his%20lieutenants%20in%20February%202008%2C%20%20Occidental%20Petroleum%20Corp%20.%0Ahired%20an%20additional%20lobbyist.&topic=business_finance> - Print<http://www.bloomberg.com/news/print/2011-06-14/qaddafi-coddled-by-u-s-oil-companies-whose-hearts-are-where-the-money-is.html> - Email<?body=The%20week%20after%20U.S.%20oil%20executives%0Ain%20Libya%20received%20tongue-lashings%20from%20%20Muammar%20Qaddafi%20%20and%20one%0Aof%20his%20lieutenants%20in%20February%202008%2C%20%20Occidental%20Petroleum%20Corp%20.%0Ahired%20an%20additional%20lobbyist.%0A%0Ahttp%3A%2F%2Fbloom.bg%2FmNZKhW&subject=Bloomberg%20news%3A%20Qaddafi%20Coddled%20by%20U.S.%20Oil%20Companies%20Whose%20Hearts%20Are%20Where%20The%20Money%20Is> - <http://bloom.bg/mNZKhW> [image: Qaddafi Beloved by U.S. Oil Whose Hearts Are Where Money Is] U.S. oil companies rallied on behalf of Muammar Qaddafi, according to formerly secret State Department cables published this year by WikiLeaks and lobbying records. Photo: Victor Sokolowicz/Bloomberg [image: Ex-Central Bank Head Bengdara on Qaddafi's Finances] Play Video <http://www.bloomberg.com/video/70820616/> June 14 (Bloomberg) -- Farhat Bengdara, who ran Libya's central bank before defecting, talks with Bloomberg's Lara Setrakian about Muammar Qaddafi's finances and regime outlook. They spoke yesterday in Dubai. (Source: Bloomberg) [image: Occidental Petroleum Corp.'s onshore Goldsmith field] Occidental Petroleum Corp.'s onshore Goldsmith field in the Permian Basin, near Midland, Texas. Source: Occidental Petroleum Corp. via Bloomberg The week after U.S. oil executives in Libya received tongue-lashings from Muammar Qaddafi <http://topics.bloomberg.com/muammar-qaddafi/> and one of his lieutenants in February 2008, Occidental Petroleum Corp. (OXY)<http://www.bloomberg.com/apps/quote?ticker=OXY:US>hired an additional lobbyist. Hogan & Hartson, one of Washington <http://topics.bloomberg.com/washington/>s oldest law firms, had one mission, according to documents filed by Occidental: To get Libya exempted from a law signed the previous month by President George W. Bush <http://topics.bloomberg.com/george-w.-bush/>letting American terrorism victims seize assets of countries found liable. The dictatorship was an explicit target of the legislation. Qaddafi had taken responsibility for the 1988 crash of a Pan Am flight in Lockerbie, Scotland, that killed 270 people, including 189 Americans. Courts in France, Germany and the U.S. also had linked his regime to a 1989 blast that downed a Paris-bound flight in the Sahara, killing 171, and a 1986 attack at a Berlin disco that killed two American soldiers and a Turkish woman. U.S. oil producers nonetheless rallied on behalf of Qaddafi, according to formerly secret State Department cables published this year by WikiLeaks and lobbying records. The six U.S. oil companies, including Occidental, and two U.S. units of foreign companies doing business in Libya<http://topics.bloomberg.com/libya/>, boosted lobbying expenditures 63 percent to $75.8 million in 2008, when they were pursuing the waiver for Libya, filings show. Congress voted in July 2008 to spare Libya from the terrorism measure in exchange for its promise to create a fund for victims. The companies wooing of U.S. lawmakers and officials seemed to have paid off. February Uprising Then came the uprising in February that triggered the civil war now ravaging Libya. The U.S. oil companies have largely abandoned production and pulled their employees out of the country, underscoring the futility of their actions to help Qaddafi and, in the view of critics, their dubious propriety. I dont understand where the corporate citizenship comes in, said Senator Frank Lautenberg <http://topics.bloomberg.com/frank-lautenberg/>, the New Jersey Democrat who sponsored the amendment that incurred Qaddafis wrath. In many cases, their hearts are where the money is, he said in an interview. Lautenberg, who had singled out Qaddafi in introducing his amendment, ultimately co-sponsored the waiver for Libya because of the victims compensation fund. The oil companies efforts for Qaddafi and their own profits enriched a repressive regime, said Arvind Ganesan, business and human rights director in the Washington office of Human Rights Watch<http://topics.bloomberg.com/human-rights-watch/>. Welcome Relief Instead of pushing for short-term stability in business, these people should have been pushing for more accountability by the Libyan government, said Ganesan, who has studied and written about Africas oil industry. The current upheaval shows what happens when you dont, he said in an interview. For the companies operating in Libya at the time -- Occidental, ConocoPhillips, Exxon Mobil Corp. (XOM)<http://www.bloomberg.com/apps/quote?ticker=XOM:US>, Marathon Oil Corp. (MRO) <http://www.bloomberg.com/apps/quote?ticker=MRO:US>, Hess Corp. (HES) <http://www.bloomberg.com/apps/quote?ticker=HES:US>, Chevron Corp. (CVX) <http://www.bloomberg.com/apps/quote?ticker=CVX:US> and the U.S. subsidiaries of BP Plc and Royal Dutch Shell Plc (RDSA)<http://www.bloomberg.com/apps/quote?ticker=RDSA:LN>-- the exemption was a relief. It meant a continuing opportunity to tap Libyas coveted light, easily refined crude and to solidify ties with a country that has the largest proven reserves in Africa. In 2008, U.S. companies were accounting for 30 percent of the 1.7 million barrels of oil Libya produced daily, a cable from the U.S. embassy in Libya said on Aug. 29 of that year. Marathon in 2008 generated 22 percent of its net worldwide production in Libya, according to Sam Hanna, an analyst for Englewood, Colorado-based IHS Inc. (IHS)<http://www.bloomberg.com/apps/quote?ticker=IHS:US> Lobbying Success The companies waiver quest gained urgency after Qaddafis demand that they get Libya off the hook or else, according to interviews and State Department cables examined by Bloomberg that were posted by WikiLeaks on its website. Qaddafi chose executives of two companies with successful lobbying track records in Washington to convey his message. On or about Feb. 24, 2008, the dictator summoned ConocoPhillips Chairman and Chief Executive Officer James J. Mulva to Sirte, Qaddafis hometown in northern Libya. Mulva endured a half-hour browbeating, according to a March 12, 2008, cable<http://www.wikileaks.ch/cable/2008/03/08TRIPOLI214.html>written by Chris Stevens, U.S. charge daffaires for Libya. Qaddafi threatened to dramatically reduce Libyas oil production and/or expel U.S. oil companies, and told Mulva to engage members of the U.S. Congress and The Administration on the issue, Stevens wrote. On Feb. 25, Shokri Ghanem, chairman of Libyas state-owned oil company, chastised Phil Goss, Exxon Mobils country manager, for almost an hour, Stevens wrote. U.S. companies had to tell Washington that Libya was serious, about slashing production in retaliation, according to the Stevens cable, which is among thousands of State Department documents published since January by WikiLeaks. Court Ruling John Roper, a spokesman for Houston-based ConocoPhillips (COP)<http://www.bloomberg.com/apps/quote?ticker=COP:US>, declined to comment on the reported meeting. Patrick McGinn, a spokesman for Irving, Texas-based Exxon Mobil, said in an e- mail, We do not comment on media reports, speculation or classified documents. Stevens declined to comment in an e-mail from Benghazi, Libya, where he is now a special envoy to the Libyan opposition. A U.S. District Court ruling two weeks before Bush signed the bill with the Lautenberg measure illustrated its threat to oil companies. The court ordered Libya and government officials to pay $6 billion to the families or estates of six American victims of Frances UTA Flight 772 that crashed in 1989. More than two dozen other suits had been filed by the injured and families of those killed in attacks linked to Libya. Risks to Contracts The companies were worried that their Libyan holdings were at risk, with their contracts threatened if payments to Qaddafis government were channeled to terrorism victims by courts or potentially worthless if Qaddafi ordered them out of the country. We felt that using our assets as collateral in finding a solution to the Lockerbie funding was extremely unfair, Don Duncan, who was ConocoPhillips top lobbyist at the time of the Qaddafi meetings, said in an interview. Oil companies in Libya had to perform a balancing act after the Lautenberg amendment, said Duncan, who retired in April 2008, before the Libya exemption was granted: Fight against legislation they felt to be unjust without being seen as arguing against the interests of terrorism victims. Its not something you develop white papers on, Duncan said. Within days of Qaddafis scolding of ConocoPhillips Mulva, the U.S.-Libya Business Association, formed in Washington by U.S. oil companies operating in Libya, wrote to Secretary of State Condoleezza Rice urging her to pursue a waiver from the law. It unjustly puts the entire burden of terrorism claims reparations on a few U.S. companies that have made substantial investments in Libya, according to the letter. Sanctions Lifted The U.S. Chamber of Commerce, the National Association of Manufacturers and the National Foreign Trade Council joined the Libya group in signing the letter. David Goldwyn, a Washington consultant who previously was an Energy Department assistant secretary for international affairs, had the U.S.-Libya Business Association as a client at the time and served as its executive director. The association paid Goldwyns firm $203,500 in the fiscal year ended June 30, 2008, according to filings with the Internal Revenue Service. The group was created after a 2003 rapprochement with Libya, in which Qaddafis government renounced terrorism and weapons of mass destruction. The U.S. responded to Qaddafis gesture by lifting 19-year- old sanctions on Libya. American oil companies moved into the country to make up for time lost to European competitors such as Rome-based Eni SpA (ENI)<http://www.bloomberg.com/apps/quote?ticker=ENI:IM>and Paris-based Total SA, according to cables spanning 2004 through 2009 published by WikiLeaks. Fierce Competition There was fierce competition to enter the Libyan market, a Nov. 21, 2007, cable from the embassy in Tripoli said. More than 40 companies were already operating there, and the latest bidding for exploration and production rights had drawn offers from 60 oil producers, according to the cable. Libya was an exceptionally difficult place in which to operate, the cable<http://www.wikileaks.ch/cable/2007/11/07TRIPOLI979.html>said. The state-owned National Oil Corp. was seeking a bigger share of the oil the companies produced than called for in negotiated agreements, raising serious questions about NOC adherence to the sanctity of existing contracts, according to a cable from a U.S. embassy official on Oct. 26, 2007. Visa Struggles The Americans also struggled to get employee visas, which were usually contingent on hiring Libyans, the November cable said. Qaddafis government regularly assigns both qualified and unqualified Libyan workers to foreign energy companies, which often reacted by paying these individuals without expecting them to work, according to a State Department investment-climate statement last March. The rule of thumb was one job to a Libyan for each U.S. employees initial visa and another Libyan job for every year the U.S. worker stayed. The U.S. companies pushed on. In November 2007, Exxon Mobil, the worlds largest publicly traded oil producer, added more than 2.5 million offshore acres in the Mediterranean Sea to its Libyan block. This was a 50 percent increase and another step for Exxon Mobil towards regaining a major share of the Libyan market, a cable said that month. With the country planning to increase production to 3 million barrels daily by 2013, Libya promised to be lucrative for oil companies set up there. Very Attractive Libya is a very attractive place, Occidental Chairman and CEO Ray R. Irani told analysts on an October 2007 earnings call. The Lautenberg amendment threatened to undo everything. We talked to both the State department and the Libyan government about the compensation issue, Goldwyn said in an interview, speaking of the U.S.-Libya Business Association. We provided the State Department our insights, we told them the message we were delivering to the Libyan government and helped them brainstorm. Companies acted on their own as well. Among them was Los Angeles-based Occidental, which had extended more than a dozen Libya contracts for 25 years, agreeing to spend more than $13 billion in the country, according to Stevens cables, one of which said Occidental was spending 70 percent of its global exploration budget in Libya. With the hiring of Hogan & Hartson in March 2008, Occidental obtained the services of former House Republican leader Robert Michel and former Representative John Edward Porter, who both worked for the firm. Occidental paid $190,000 to Hogan & Hartson, as well as $100,000 to OMelveny & Myers, a Los Angeles law firm whose Washington office already had been hired to focus on the Libya exemption. U.S. Chamber Richard S. Kline, a spokesman for Occidental, declined to comment. Robert Kyle of Hogan Lovells <http://topics.bloomberg.com/hogan-lovells/>, the successor to Hogan & Hartson, led the firms lobbying effort and didnt respond to messages seeking comment. The U.S. companies all used their in-house lobbyists to make the case as well, their lobbying reports show. We lobby ethically, constructively and in a bipartisan manner, Chevron spokesman Lloyd Avram said in an e-mail. Hess spokesman Jon Pepper didnt respond to an e-mail and phone calls. Lee Warren, a Marathon spokesman, declined to comment. The oil companies also sought help from the U.S. Chamber of Commerce, the biggest business lobbying group. R. Bruce Josten, the Chambers executive vice president for government relations, said in an interview he attended meetings about the waiver issue with oil company representatives, Goldwyn of the U.S.-Libya Business Association and lawmakers from oil-producing states including Democratic Senator Mary Landrieu of Louisiana and Republican Senator Lisa Murkowski of Alaska. Libyas Income For Libya, the concern was that oil taxes, rents and production money from U.S. companies would be diverted to pay victims. Oil and gas proceeds accounted for more than 90 percent of Libyan government revenue, according to a report last October by the International Monetary Fund<http://topics.bloomberg.com/international-monetary-fund/>. The Libyans wanted to protect that income, which their government estimated at $1 billion a month and a ConocoPhillips executive put at $500 million to $750 million a month, according to a Stevens cable. Libya demanded that U.S. companies begin paying in euros to avoid the U.S. financial system, Stevens wrote. The companies complied, he said in a cable. On March 12, Libya signed a $2.4 million contract with its own lobbyist, the Livingston Group, according to reports filed with the Justice Department<http://topics.bloomberg.com/justice-department/>. The firm was co-founded by Bob Livingston, a former Republican representative from Louisiana. Ongoing Contact Throughout the week of March 24, the Livingston Group had ongoing contact about Libya by phone with Goldwyn, a Hogan & Hartson lawyer retained by Occidental, the U.S.-Libya Business Association and the U.S. Chamber of Commerce, according to the filings. The Livingston Group also escorted Libyas ambassador to meetings with 64 members of Congress between April and July of 2008, the firm reported to the Justice Department. Livingston himself met twice with oil company representatives about a Libya waiver, he said in an interview. They were very anxious to do business over there, he said. The Livingston Group dropped Libya as a client in 2009. The message was getting through. On March 18, four members of Bushs Cabinet -- Secretary of State Rice, Defense Secretary Robert Gates, Energy Secretary Samuel W. Bodman and Commerce Secretary Carlos M. Gutierrez -- had written to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid proposing legislation that would let Bush exempt Libya from the Lautenberg amendment. Chilling Effect Applying it to countries no longer designated a state sponsor of terrorism would hamper severely U.S. efforts to get those countries to stand with us against the threats of global terrorism, according to the letter. Allowing assets to be attached also would have a chilling effect on potentially billions of dollars in investments by U.S. companies in Libyas oil sector, investments affecting U.S. energy security, the Cabinet secretaries wrote. Lobbying for the waiver continued through April 2008. Marathon, which had formed a joint venture with Hess and ConocoPhillips that spent $1.8 billion to return to Libya after the sanctions were lifted in 2004, hired Amos Hochstein, a former senior policy adviser to the House International Relations committee, to work solely on the Libya issue, according to disclosure forms. Hochstein, who declined to comment, had just finished a stint as deputy campaign manager for Senator Christopher Dodds unsuccessful bid for the Democratic nomination for president. Previously, hed been employed by lobbying company Cassidy & Associates, where he now serves as executive vice president for international operations. Rice Visits Qaddafi On July 31, 2008, the Libyan Claims Resolution Act passed by unanimous consent in Congress. Signed into law by Bush on Aug. 4, the legislation gave Libya immunity from lawsuits tied to past terrorism. The following month, Secretary of State Rice made the highest-level visit to Libya by a U.S. official in more than 50 years, welcoming Qaddafi as an ally in the war against terrorism and symbolically sealing ties between the two nations. On Feb. 10, 2009, according to a cable written two days later, Ghanem, Libyas oil chief, met with Gene Cretz<http://topics.bloomberg.com/gene-cretz/>, the new U.S. ambassador, saying he was pleased that normal relations had been restored. The meeting also made it clear that Qaddafis demands hadnt ended. The state-owned oil company had lent $700 million to the $1.5 billion compensation fund and needed reimbursement, Ghanem told the ambassador, according to the cable. Prime Minister Baghdadi Mahmudi had assembled international oil companies for a meeting earlier in the month and pressed them to contribute, Ghanem said. Their failure to do so had led the leadership to conclude that the companies were merely exploiting Libyas resources, the cable paraphrased Ghanem as saying. Pulled Out Cretz responded that putting pressure on U.S. companies to finance the fund crossed a red line and contradicted the understanding between Libya and the U.S. There is no indication in the cables that any U.S. company donated. Almost two years later to the day from that meeting, protesters following the lead of pro-democracy demonstrators in Egypt and Bahrain rallied in Benghazi, demanding Qaddafis ouster and set off a civil war that continues today. Conoco, Marathon, Occidental and Hess all have quit production in Libya and pulled expatriate employees out of the country, according to spokesmen for the companies. Exxon Mobil wasnt producing oil in Libya at the time of the uprising and hadnt yet begun planned exploratory drilling, said Margaret Ross, a spokeswoman. Chevron already had pulled out in 2009, after an exploratory well came up dry. The companies say they dont know whats happening to their assets in Libya. We have no visibility on that, David Roberts, a Marathon executive vice president, told analysts and investors on a May 3 earnings call. Libya and the whole thing was not exactly a financial success for the oil companies, Fadel Gheit, an analyst for Oppenheimer & Co. in New York<http://topics.bloomberg.com/new-york/>, said in an e-mail, although it was a bonanza for the madman Qaddafi. To contact the reporters on this story: Judy Pasternak in Washington at jpastern...@bloomberg.net; Jim Snyder in Washington at jsnyde...@bloomberg.net; Nicole Gaouette in Washington at ngaoue...@bloomberg.net [Non-text portions of this message have been removed] ------------------------------------ --------------------------------------------------------------------------- LAAMN: Los Angeles Alternative Media Network --------------------------------------------------------------------------- Unsubscribe: <mailto:laamn-unsubscr...@egroups.com> --------------------------------------------------------------------------- Subscribe: <mailto:laamn-subscr...@egroups.com> --------------------------------------------------------------------------- Digest: <mailto:laamn-dig...@egroups.com> --------------------------------------------------------------------------- Help: <mailto:laamn-ow...@egroups.com?subject=laamn> --------------------------------------------------------------------------- Post: <mailto:la...@egroups.com> --------------------------------------------------------------------------- Archive1: <http://www.egroups.com/messages/laamn> --------------------------------------------------------------------------- Archive2: <http://www.mail-archive.com/laamn@egroups.com> --------------------------------------------------------------------------- Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/laamn/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/laamn/join (Yahoo! ID required) <*> To change settings via email: laamn-dig...@yahoogroups.com laamn-fullfeatu...@yahoogroups.com <*> To unsubscribe from this group, send an email to: laamn-unsubscr...@yahoogroups.com <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
