Over the weekend, I managed to catch up with a friend of mine who just escaped from Libya by the skin of his teeth. Sent there by an oil major to explore for deep water oil and gas in the Gulf of Sidra, he spent the first few weeks of the revolution staying at his home in an expatriate compound in Tripoli, out of harm’s way.
When he went out to forage for food, a car with four rebels pulled up alongside. One said “If you want to save your life, leave.” He managed to grab a seat on one of the last flights out of the country before the coalition attack, carrying just a handbag. The next day the fighting spilled over into his neighborhood. A week later his employer sent someone to see what was left. The entire compound had been looted, stripped bare of anything of value, and all the cars were stolen. My friend had lost all his worldly possessions.
He is now on an extended vacation awaiting a new assignment, and filling out compensation requests, which the company has promised to make whole. I asked him exactly how much oil really was in Libya. He said that his firm had succeeded in finding commercially viable gas deposits off shore. But the government demanded such aggressive terms for further development that there was nothing left for the company.
The majors were ready to walk away from Libya even before the recent troubles started. Perhaps this is why the attack went forward so quickly. The real potential in Libya was in the older fields inland which had yet to benefit from modern technology. But the Gaddafi regime had yet to permit access to these areas.
In the meantime, the company is keeping 125 local staff on the payroll, in case there is a quick return to Libya. How the personal department manages this without a functioning banking system in the country is beyond my imagination. But oil majors have the world’s most sophisticated and competent managements, so I image they’ll somehow pull it off. A new regime will certainly be much more open to dealing with foreign companies. And after all, Gaddafi is only president for life.
By. Mad Hedge Fund Trader