Libyan Oil Clout Now Pushing for Buying Stake in BP

Libyan bargain hunters look to scoop up shares of BP. Should the world’s environmentalists be concerned? Image of Libyan president al-Gaddafi via Daily Mail

News that doesn’t bode well for the environment? Rich Libyan oil barons are vying for a controlling stake in British Petroleum (BP) the UK oil company leaking billions from the Gulf oil spill off the coast of Florida. Libya, who already had a deal in the works with BP for offshore drilling off the coast of Libya, look to increase their oil wealth clout even more by purchasing a sizable stake into the British oil giant.

Libya has been in Green Prophet news recently as the country involved in spending billions for lavish, possibly absurd, projects to “green” the country’s parched desert regions with projects such as circular pivot irrigation farmingtapping ancient fresh water from deep underground aquifers.

The BP purchase aspirations now stem from the oil giant’s current reversals of fortune as a result of the continuing oil spill (or shall we say underwater gusher) in the Gulf of Mexico. This latest bit of Libyan extravagancy is reported by the Dow Jones Newswire which reports how the Libyan National Oil Company Chairman Shokri Ghanem is recommending the a purchase in BP stock shares to the Libyan Investment Authority, or LIA, the North African state’s sovereign wealth fund:

BP shares are down about 48 per cent since April 20, when an explosion on Transocean’s Deepwater Horizon drilling rig — leased by BP for its Macondo well in the Gulf of Mexico — killed 11 workers and triggered one of the worst oil spill disasters the US has ever seen.

“BP is interesting now with the price lower by half, and I still have trust in BP. I will recommend it to the LIA,” Mr Ghanem said in a telephone interview.

“It’s a good opportunity for bargain hunters.”

Ghanem’s logic stems from BP company stock shares now selling for about half their former value before the Transocean Deepwater Horizon drilling ring blew up last April 20, killing 11 oil workers and causing the oil flow into the Gulf which has continued unabated for more than 78 days.

Ghanem says that “still has faith in BP.”

For its part, BP executives say that the company is not contemplating selling any core assets right now although they do welcome new BP shareholders. This bit of news of possible LIA interest did cause the company’s shares to rise on world stock markets.

Other countries are also minor share holders in BP stocks, including the Kuwait Investment Authority, which already owns 2.8 per cent of BP; and Norway’s sovereign wealth fund, which owns 1.3 per cent.

Libya, a country that is said to have a sizeable amount of the world’s known petroleum reserves, is now even cooperating with BP and will allow it to conduct some offshore drilling in the Mediterranean. BP will be the first non-OPEC country to drill of its coast.

With the Gulf of Mexico at the verge of being a “dead” body of water, it would be disastrous if a similar oil spill would occur in the Mediterranean, considered as the last remaining spawning area for fish species such as the blue fin tuna.

And Libya which to some extent has repaired its image of a terror nation (see CNN) at least in the eyes of the US, it doesn’t exactly have a good track record for environmental concern.

Libyan Oil Company head Ghanem commented on this new venture, that although the Gulf of Mexico spill is a “tragic accident” the oil industry in general is “moving  into new frontiers.”

If those “new frontiers” are dealing with risky deep water drilling in the waters of the Mediterranean, this could put this body of water into an even worse situation than the Gulf of Mexico since the Med has a very narrow outlet into the Atlantic Ocean.

At present, however, Mohamamd Layas, executive director of the Libyan Investment Authority, was quoted as saying that he had “no comment at this stage.”

Most likely, he is being “instructed” to keep quiet on any purchase plans.

::Dow Jones Newswire

Read more about Libyan environmental and energy projects:
Libyan Techno-farm Irrigation Project Aims to Boost Agriculture Productivity
Libya Goes Ahead With Deep Water Drilling Agreement Despite BP Oil Spill
Libyan Pivot Irrigation Farming Proves Money Can do Anything