Thursday, 24 February 2011

Libya: Security of foreign personnel and assets

The probability of a deteriorating security situation in Libya, worst of all the continuation of the confusion in government control and the conflict on the streets, could mean a breakdown in law and order at all levels of the economy.

The security of foreign personnel and assets would feature as a low priority for the security services in a situation of anarchy. Most foreign companies would withdraw all their personnel or leave a caretaker group in charge of plant and equipment.

The preservation of physical assets would be difficult under this scenario and it must be expected that serious depredations would occur.

Colonel Mu'ammar Qadhafi survival, in these circumstances, would be at the cost of systematic damage to development projects and materials imported by foreign companies that wish to finish their contracts.

In the slightly more likely event of Colonel Qadhafi or his family eventually losing control, much would depend on the rapidity with which the new authorities could impose law and order. An army coup d'etat would have the advantage of keeping in place senior officers with experience of peace enforcement whereas an inexperienced group of new ministers and security staff would find it difficult to impose peace and quiet after such an explosion of violence.

The oil sector will be particularly at risk of clashes of opinion and policies. It is an area of activity to which foreign investment is critical for growth. Libya has no history of illegal seizure of assets in the oil industry but oil and gas production could possibly be hit, because in most scenarios some degree of radical thinking could affect the new ruling groups.

Nationalisation is not on the agenda of any of the groups bidding for power. The economic development programme could suffer from random withdrawal of funds. The experienced members of National Oil Company (NOC) will be unlikely to survive a change of government – possibly leaving the whole strategy and management of the oil business in disarray.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates

No comments:

Post a Comment