Russia should recognise new Libya govt not to lose billions-experts

A new flag has been hoisted over the Libyan Embassy in Moscow, as well over the country’s diplomatic missions in other states, the former flag has been changed to a new one – the diplomats are displaying loyalty to the National Transitional Council (NTC) that has come to power. Official Moscow has so far not recognised the new Libyan authorities. Analysts believe, however, that Russia is not averse to renewing relations with Libya where it may suffer losses of 10 billion US dollars due to the regime change.

It will be most likely not easy to develop relations with the new Libyan regime: the authorities will hardly easily forgive Russia for its long-term friendly relations with Gaddafi’s regime. In any case, according to experts, the loss of a long-time ally in Africa will cause quite concrete economic damage to Russia, the first victims of which will be Russian oil and gas companies there. Russian armourers will most likely lose a reliable sales market there.

Russia has had contacts with the NTC in connection with its participation in the search for a political settlement in Libya. Special RF Presidential Envoy for cooperation with African countries Mikhail Margelov who played a mediating role visited Benghazi, NTC representatives visited Moscow. Apparently, the Nezavisimaya Gazeta newspaper writes, the time has come to take the next step now – to announce diplomatic recognition of the NTC, as is often done in similar cases, to confirm that the change of power in Libya does not change the existing status of the diplomatic recognition of that country.

“It is necessary to take measures to preserve the effect of the agreements and contracts concluded earlier between Russia and Libya,” the newspaper notes. “They were agreements between the countries that cannot become null and void because of the political and personal changes in their leadership.”

The fact that a “new Libya” will be shifted towards the western partners has already been partially confirmed: a gathering of the so-called contact group of friends of Libya has been announced in Paris on September 1, and Russia has not been invited to attend. “We have not seen such an invitation,” Russian Foreign Ministry spokesman Alexander Lukashevich said at a briefing in Moscow on Thursday.

“With regard to our position of principle on the so-called ‘international contact group of friends of Libya,’ we believe that the central role belongs to the United Nations and the UN Security Council in matters of a political settlement in Libya, and not to a quasi structure of an international contact group type or other structures,” the diplomat continued.

Earlier, President Dmitry Medvedev spoke about Russia’s “careful” position on the matter. He did not rule out, however, that Russia would consider the possibility of establishing relations with the rebels in Libya, “if they have the strength to unify the country on a democratic basis.”

Meanwhile, the issue of the change of power in Libya may result in significant losses for Russia. Before the civil war such giants as Gazprom, Gazprom Neft, Tatneft invested many billions in the development of their business in Libya, and now the risk to lose them.

Thus, Gazprom Neft planned to develop the Elephant field and was to buy half of Italian ENI stake in this project for 163 million US dollars. Now these plans will most likely not be fulfilled. Tatneft in Libya holds licenses to develop four sections in the Ghadames and Sirte districts with a total area of ··18,000 square meters. There the company has already drilled test wells and was producing oil – about 55 tonnes daily. It is unknown what will happen after the change of power in this country.

The Libyan opposition has recently said that it does not plan to cancel existing contracts with foreign oil companies, however, RBC Daily sources believe that a “screening” will nevertheless happen on the principle of “legality of contracts.”

Roughly speaking, Western countries that helped the revolution, not only have nothing to fear, but also can count on the “enhanced cooperation.” But a “corruption component” or other reasons for termination may well be found in contracts of such countries as Russia.

Russian armourers will most likely lose a reliable sales market. Losses in this sphere will be huge – enough to remember that the Gaddafi government has ordered anti-ship weapons systems worth 600 million euros, as well as the Yak-130 training planes. The contracts have not been implemented and are unlikely to be.

In addition, the Russian defence industry has suffered losses worth 4 billion US dollars as a result of the UN Security Council sanctions, which prohibited any supply of arms and military goods to the Gaddafi regime. These data are official estimates of the Rosoboronexport arms exporting company.

The rebels have made it clear that countries that have rendered invaluable assistance to the Libyan revolution with arms and money may count on preferences, while Gaddafi’ s former partners, on the contrary, will be out of the game, despite all the assurances. They warned the Russian companies that they may deny them access to the country’s oil fields. The rebels believe that Russia has provided them little support in opposing the regime of Muammar Gaddafi.

“We don’t have a problem with Western countries like Italians, French, and UK companies,’’ Abdeljalil Mayouf, a spokesman for the Libyan rebel oil company AGOCO stated. “But we may have some political issues with Russia, China, and Brazil.’’

The RF government’s Rossiiskaya Gazeta believes that Russia has lost too much time sitting on the sidelines. “Russia has refused to support Gaddafi, but at the same time did not recognise the NTC. Such reticence on the part of Russia has already led to not inviting us to the meeting of the International Contact Group on Libya. And in about a couple of months it will be found out that Russian enterprises have failed to fulfil some of contract terms in Libya and will no longer be able to work in this country.”

Orientalist Yelena Suponina quoted by Radio Liberty believes that Russia’s stance on Libya is “very vague and inconsistent.” “The only consistency in the actions of Russia is a fundamental respect for international law, to United Nations resolutions. However, we have often seen how contradictory is Moscow’s stance both on Libya and Syria. Sometimes it even seems that different officials of our government react differently to what is happening. So the questions remain in the Arab world – why Russia first behaves in such a way and then suddenly in different way? And the Russian government has so far failed to answer these questions.”

MOSCOW, August 29

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