Germany shows keen interest as Libya emerges from isolation

Oct 22, 2004 02:00 AM

As chancellor, Gerhard Schroeder does not do a lot of manual labour. But earlier, Schroeder stripped off his coat, donned a pair of gloves and turned the metal wheel that started a new oil-drilling facility. Minutes later, the beaming chancellor hoisted a plastic bottle filled with black gold into the air.
But Schroeder was not marking some sort of major new discovery in his own oil-poor country. He was actually deep in the Libyan desert, prospecting for business in the country that is led by the one-time international outcast Muammar el-Gaddafi.

Schroeder arrived in Libya late on Oct. 14 to join the effort to welcome Libya back in the world community. He then sped off for a visit with Gaddafi in the Libyan's Bedouin tent. During the visit, Schroeder had nothing but positive things to say about his host's change of direction, in which Gaddafi has evolved from a suspected backer of international terror into a business partner courted by the world's leaders.
"The country's has changed politically. You have to welcome that." Schroeder said.

The way for Schroeder’s trip was cleared by a number of political changes. In September 2003, the UN Security Council lifted sanctions imposed on Libya at the end of the 1980s as a result of terror attacks on US and French jetliners. Roughly 11 months later, Libya agreed to pay $ 35 mm in what it called a "humanitarian gesture" to non-American victims of the 1986 bombing of a West Berlin discotheque.
But the North African country has not admitted it was behind the bombing, which killed two US soldiers and a Turkish woman and injured more than 200 people.

Libya has two things Germany wants: oil and large business opportunities for its export-fuelled economy.
At the moment, Libya is Germany's fourth biggest supplier of oil, and it has the potential to play an even bigger role. Libya's oil reserves are estimated at 47 bn barrels, and it is expected to earn around $ 20 bn this year from its oil and gas business. It plans to boost its production-- from 1.4 mm bpd to about 2 mm bpd in the years ahead. And it plans to do so with foreign help.

In January, the country will issue 15 oil-exploration licenses. One German company, Wintershall, already has its sights set on these concessions.
The oil arm of chemicals giant BASF has been active in the Libyan oil and gas sector since 1958. It already accounts for 10 % of Libyan oil production, making it the country's third-largest oil producer. Schroeder tried to boost its effort during his appearance at the drilling facility.

A chunk of these earnings will flow into projects aimed at improving the country's infrastructure, which fell apart during the years when the UN sanctions were in effect.
"There is a huge amount of catch-up work that has to be done, especially in the infrastructure," said Walter Englert, a member of a group that coordinates German-Libyan business relations. These needs apply not only to oil production but also to health care, training and environmental technology. These are"the areas where Germany's mid-sized companies are strongest," Englert said.

In Berlin, some of the chancellor's political opponents said Schroeder was too focused on business during his trip and was forgetting about human rights. This record was recently described as deplorable by a British official.
"The chancellor would have been well advised if he had made clear that he did not talk to Gaddafi only about business," said Ruprecht Polenz of the opposition Christian Democratic Union.

Source: Frankfurter Allgemeine Zeitung
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