Libya's oil minister flees country; production at standstill

Libya’s Oil Minister Shukri Ghanem is reported to have fled the country, becoming one of the highest profile figures to abandon the government of Moammar Gadhafi since fighting erupted in February.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, May 17 -- Libya’s Oil Minister Shukri Ghanem is reported to have fled the country, becoming one of the highest profile figures to abandon the government of Moammar Gadhafi since fighting erupted in February.

“All…we know is that Shukri Ghanem is in Tunisia," said a spokesman for the Libyan opposition's Interim National Council (INC) in response to reports by Tunisian security officials and others that the oil minister had fled.

INC Finance and Oil Minister Ali Tarhouni, who hopes to represent Libya at a meeting of the Organization of the Petroleum Exporting Countries in June, said he understood that Ghanem had left his post.

Ghanem, who also served as head of Libya’s National Oil Co., reportedly crossed into Tunisia by road near the Ras Jdir border crossing, and was en route to Tunis, capital of the North African state.

Abdel Moneim al-Houni, a former Libyan diplomat who earlier fled the country, confirmed that Ghanem had defected, saying that he spoke with the former oil minister after he crossed the border.

Al-Houni said no official announcement was made of Ghanem’s departure due to concerns about the safety of his family still in Tripoli. Al-Houni said most officials remaining in Tripoli are forced to stay under intimidation and pressure.

A Libyan official denied the claims, saying that travel is part of Ghanem’s job as minister of oil.

"I have no news that he has resigned or defected or something," the Libyan official said. "Part of his job is to travel and deal with oil companies. So we have not heard anything beyond that."

Mixed reports
Ghanem was appointed chairman of the NOC in March 2006, giving him control over oil policy. But reports emerged in 2009 that he had resigned as part of a turf war between reformers and a conservative old guard inside Libya's ruling elite. Ghanem was reinstated to his position.

Earlier this year, Arab television stations said on at least two occasions that Ghanem had left the country, but he denied the reports. "You see me. I am in my office. I am still coordinating the industry," he told Reuters.

Ghanem’s departure will be seen as a further loss of legitimacy for the Gadhafi regime, which has already been hit by the defection of several other prominent members of the government.

Ghanem’s defection represents the highest profile departure from Gaddafi's embattled government since foreign minister Moussa Koussa sought safe haven in London at the end of March.

Others who have defected include Interior Minister Abdel-Fatah Younes; Justice Minister Mustafa Abdul-Jalil, and Ali Abdessalam Treki, a former United Nations General Assembly president, and a host of ambassadors and other diplomats.

Struggles continue
Ghanem’s departure also comes at a critical time in the struggle between Gadhafi’s forces and the rebels who control Libya's oil fields and facilities in the east of the country.

The military victory that rebels once sought has ground down to a stand-off, if not a halt, and many rebels see their best chance of victory coming from a collapse of central power in Tripoli driven by defections and disaffection.

Meanwhile, until the outcome of the war is decided, any further production is unlikely from the Arab Gulf Oil Co. (Agoco), which was responsible for more than a quarter of Libya's former production of 1.6 million b/d.

Acogo spokesman Abdeljalil Mohamed Mayuf said the shut in is due to the security situation in the country, with forces loyal to Gadhafi able to attack and halt production at will.

Mayuf said the decision to suspend production came after rocket attacks on Apr 4 seriously damaged a pumping station and production facilities at southeast Messla oil field. Another attack hit a pumping station halfway along the 510 km pipeline from Messla to Tobruk port, killing eight rebels serving as guards.

Gadhafi’s forces struck after the rebels began exporting oil, selling off 1 million bbl with the help of Qatar. The exports were intended to raise funds to battle Gadhafi, who still controls the western half of the country.

The stand-off leaves rebel forces in urgent need of cash, according to Tarhouni, who said Libya's rebel leadership has set a budget but that it cannot secure the funds needed.

"The budget we submitted is about $3 billion for 6 months," said Tarhouni, adding, “I'm chasing liquidity, I'm asking for any form that will give us liquidity, a line of credit, loans. So far we haven't been able to get it.”

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