Italy seeks ways to enable Libyan rebel oil sales

Reuters News
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Posted: Apr 19, 2011 1:33 PM
Italy seeks ways to enable Libyan rebel oil sales

By James Mackenzie

ROME (Reuters) - A meeting of Western and Middle Eastern states in Rome next month will seek ways of enabling oil from Libyan rebel areas to be sold on world markets, Italian Foreign Minister Franco Frattini said on Tuesday.

The comments underline the uncertainty created by United Nations sanctions, which were intended to constrain Libyan leader Muammar Gaddafi but have also prevented rebels from selling oil to raise funds themselves.

Speaking after talks with Mustafa Abdel Jalil, head of the main Libyan rebel council, Frattini said the Libya "Contact Group" of European and Middle Eastern countries, the United Nations, the African Union and the Arab League would meet in Rome in early May.

No final date was set but Italian officials have said May 2 was possible.

Frattini said the group would look at ways of freeing up frozen assets belonging to Gaddafi, and on how to allow "the sale of oil products produced in Cyrenaica (eastern Libya) by producers and suppliers to international buyers with transparent financial instruments."

"On this, we will be asking for the adoption of a decision in Rome," he said.

Jalil, who also met Italian Prime Minister Silvio Berlusconi before going to Paris on Wednesday, appealed to Western powers conducting air strikes against Gaddafi's forces to step up the pressure.

But he stopped short of asking Rome to lift restrictions that prevent its aircraft taking part in the NATO operation from opening fire.

"What we hope that our Italian friends will do is to put further military pressure on Gaddafi to force him to leave the country and to give up," he told reporters.

BUSINESS TIES

As well as asking for military and other support including student scholarships, Jalil's visit was also aimed at building up economic ties with Italy, the former colonial power that was among Gaddafi's closest friends in Europe until the revolt.

Abdurrahman Shalgham, a former Libyan ambassador to the United Nations who was traveling with Jalil, said the delegation had had brief contacts with Italian firms including utility Enel, defense electronics maker Finmeccanica and Italy's top bank, Unicredit.

Paolo Scaroni, the chief executive of Eni, the largest foreign oil exporter from Libya prior to the upheaval, was also present at the meeting with Berlusconi, according to an official, who spoke on condition of anonymity.

The United States, Britain, France and Qatar are among countries urging the sale of oil from eastern Libya, which includes the area referred to as Cyrenaica, where the rebels have established their stronghold.

So far, the rebels have been able to export only small quantities of oil with the help of Qatar, which, along with France and Italy, was among the first countries to recognize the insurgent Provisional Transitional National Council.

Jalil thanked Italy for its support and reiterated that a future rebel government would uphold all existing Libyan treaties and commercial agreements with foreign partners. He said early supporters would be regarded particularly favorably.

"All future economic agreements will be especially directed toward those who have supported us today and who have been on our side in this delicate phase," he said.

"There will be strong cooperation and friendship with Italy, Qatar, France in the first instance. After them will come all our other friends -- the United States, Great Britain -- which have supported us, but each according to how much they have supported us today."

(Editing by Mark Heinrich)