Libya’s path to oil riches remains treacherous

Associated Press

NEW YORK

Enormous oil wealth lies thousands of feet below Libya, but whether it will be claimed, and by whom, now that Moammar Gadhafi is gone is an open question.

Drilling and shipping equipment has been damaged in the Libyan civil war, land mines must be cleared around oil fields, and a legal framework for how oil money is collected and distributed must still be worked out.

Whatever government is formed could open vast regions for drilling at reasonable terms — or it could demand that foreign oil companies pay exorbitant royalties or require them to build infrastructure in exchange for access to oil.

Libya sits on the biggest reserves of oil in Africa. Those resources could help Libya recover from Gadhafi’s decades-long corruption and the civil war. Or the oil could be kept out of reach by political chaos, crumbling infrastructure or violence.

The oil industry already had begun to recover in recent months, especially in areas where fighting had stopped. Libya is producing about a quarter of the 1.6 million barrels per day of oil it pumped out before the war.

Analysts say it will take a year for the country to return to full oil production, but uncertainties remain.