Marsa el-Brega was once a tiny Libyan fishing village on the most southerly tip of the Mediterranean — now it is a thriving port handling 300 ocean-going ships a year and, with the help of Shell, is poised to become one of the world’s key energy terminals, capable of exporting huge quantities of gas to Britain.
The Anglo-Dutch oil company is currently upgrading the liquefied natural gas (LNG) from 500,000 tonnes a year to 3.2 million and has just drilled the first of a dozen planned wells. These are the fruits of a historic visit in March 2004 by then British prime minister Tony Blair, but also part of a closely orchestrated campaign by British ministers and Big Oil as documents seen by this reporter reveal.
At least a dozen meetings — and possible more than double this number — were held in Tripoli and London between major Foreign Office officials and Shell top brass with Libya’s energy on the agenda.
British Foreign Secretary David Miliband, Prince Charles and even the former Labour party Lord Kinnock discussed Shell’s business in the region and helped promote the UK’s wider energy agenda.
The Shell deal did not go down well with US rivals who felt barred from contact with Libya. ExxonMobil had particular reason to be miffed because the Texan giant used to run the Marsa el-Brega LNG facility in the 1960s and 1970s.
British oil interests got its second major boost in Libya — already one of the world’s biggest oil and gas producers — when BP won rights for exploration and development work there. Once again that oil deal was signed alongside a second Blair visit, in May 2007.
“With its potentially large resources of gas, favorable geographic location and improving investment climate, Libya has an enormous opportunity to be a source of cleaner energy,” BP group chief executive Tony Hayward said.
More than US$900 million was to be invested in Libya in onshore and offshore drilling in an area bigger than Kuwait — but total spending there could top US$20 billion over the next two decades.
“It is BP’s single biggest exploration commitment,” said Hayward, whose company seemed to hold such close relations with government it was dubbed Blair Petroleum.
But it is Shell — sometimes seen by critics as a branch of the Foreign Office despite its headquarters in The Hague — that seems to have been given the biggest lift by the British establishment.
Documents released under a Freedom of Information Act request show the scale of the effort to win commercial advantage in Libya. The details raise questions about whether it is possible the Scottish decision to release the Lockerbie bomber Abdelbaset al-Megrahi last week could have been done without the acquiescence of the British government as it insists it was.
At least 11, but possibly as many as 26, meetings took place — many in Tripoli — between Shell executives and senior ministers or mandarins in a period between 2004 and 2007. The Foreign Office has yet to provide details of what exactly was discussed at the meetings, but the request asked for any discussions with Shell on either Libya or Egypt, the latter being of much less political or potential commercial importance to the oil company.
Miliband met Malcolm Brinded, the Shell exploration director, in October 2007 while James Smith, the Shell UK chairman, met Jack Straw when he was foreign secretary in July 2003.
The Prince of Wales attended a reception at the British embassy on 21 March 2006, putting a bit of royal weight behind the drive to put Britain in pole position as Libya’s 44 billion barrels of oil reserves were opened up again to western firms.
The royal family has long been seen as a trump card in the Middle East. Prince Andrew has also visited Libya as a special overseas trade ambassador for Britain but has dropped plans to go there next month following the furore over Megrahi’s release.
The US oil companies used to have a virtual stranglehold on Libya and companies such as Occidental Petroleum grew wealthy there until Libya nationalized overseas oil interests in 1974 and Western sanctions were introduced. Occidental is now back and jostling against Shell and BP to find new oil and gas in a country whose production has plunged from 3.3 million barrels a day in the mid-1960s to about half that level now.
It is not just the US that wants access to Libya, but also China, Russia and other major powers whose national oil companies are seeking new supplies.
The decline in North Sea reserves and climate change have fed into British determination to improve the country’s energy security and exploit Libyan oil and gas. Marsa el-Brega would provide relatively clean fuel for UK power stations and help avoid dependence on piped gas from countries such as Russia which are deemed willing to use energy as a political weapon.
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