Megrahi's Death Only Beginning in Libyan Oil Saga

Scottish authorities this week said the death of convicted Lockerbie bomber Abdelbaset al-Megrahi puts an end to conspiracy theories surrounding his controversial release in 2009. Scottish authorities insisted his release was on compassionate grounds because of a terminal prostate cancer diagnosis. Megrahi died this week at his home in Tripoli of cancer. Given the series of suspicions surrounding not only former Libyan officials, but also the role of European energy countries in Libya, Megrahi may have taken a few national secrets with him to the grave.

Shortly after the Deepwater Horizon oil disaster in the Gulf of Mexico in 2010, U.S. lawmakers started looking into allegations that British energy company BP, the supermajor tied to the spill, was somehow involved in shady deals in Libya. U.S. Sen. Robert Menendez, who serves on the Senate Foreign Relations Committee, asked London what role, if any, British business interests had in the controversial release of Megrahi, the only person convicted in the 1988 bombing of Pan Am Flight 103. Menendez, in a letter to British Foreign Secretary William Hague, said it appeared Megrahi's release was "motivated by trade considerations," namely, a $900 million oil and natural gas exploration contract for BP.

The Scottish government, in statements following confirmation of Megrahi's death, said his release on compassionate grounds was taken "in good faith." Any suggestions the matter was somehow related to BP, the government said, were put to rest by the U.S. government in 2010. Nancy McEldowney, principle deputy assistance secretary for the U.S. State Department, said there were no records that indicated BP, or any other company, tried to intervene in the Megrahi affair. During that same hearing, however, Geoff Porter, founder of North Africa Risk Consulting, Inc., testified that BP told the British government that Megrahi's continued detention would "pose challenges" to its ability to do business in Libya.

"Like every company that does business in Libya, BP was well aware of the country's political risks," he said in his prepared remarks. "Megrahi's release would reduce BP's exposure to political risk."

BP later said it was not in a position to issue comments on decisions made by the Scottish government. Its deal was then ratified by the Libyan government.

Porter testified that the Gadhafi regime didn't see much difference between political and economic affairs.  Access to its oil riches, he said, was linked to Tripoli's foreign policy ambitions. While Edinburgh likely wasn't tied to the BP deal, Tripoli had made it clear that any bilateral trade measures were tied to Megrahi's release. Porter said that in Gadhafi's Libya, companies like BP did well so long as bilateral diplomatic relations were good.

Megrahi is dead and a new government has replaced Gadhafi in Tripoli. Those authorities, however, have said Gadhafi-era contracts still hold and a former consultant for Italian energy company Eni now holds the oil ministry. The Scottish government said Megrahi's death is where the conspiracy theories end. A closer look, however, suggests it's only the beginning.

By. Daniel J. Graeber of Oilprice.com