How Britain did business with Libyan tyrant Colonel Gaddafi

by Graham Hiscott, click here to view this on Daily Mirror

BRITAIN’S decision to cancel eight export contracts to Libya smacks of too little, too late.

For while ministers condemn the massacre of hundreds of demonstrators, we have been busy forging close ties with Colonel Gaddafi’s regime.

And as Foreign Secretary William Hague was calling on the dictator to respect human rights, the Government was still waxing lyrical about the business opportunities in Libya.

The UK Trade and Investment website suggests there is big money to be made, describing the country as “potentially the fourth most attractive overseas market for UK exporters” over the next few years.

Foreign firms have enjoyed rich pickings since Libya came in from the cold with ex-PM Tony Blair’s “Deal in the Desert” in 2003, relinquishing its weapons of mass destruction to trigger the lifting of UN sanctions.

But the potential loss of lucrative business deals led to claims that British ministers backed the controversial release of Lockerbie bomber Abdelbaset al-Megrahi.

UK trade with Libya is worth an estimated £1.5billion a year, with British exports soaring more than 50% between 2008 and 2009. More than 150 UK-based companies operate in the country, many like Biwater, AMEC, JCB and Mott MacDonald supplying industrial machinery and engineering services.

And the country’s newly well-off have attracted other firms, including British high street chains Next, Monsoon, Accessorize and Marks & Spencer, which yesterday announced it had all closed its stores in Tripoli for security reasons.

Virtually all Libya’s foreign earnings come from oil and gas, with the country raking in more from oil than it spends on its annual budget.

At 1.7 million barrels a day, it is Africa’s second largest oil producer and is Europe’s single biggest supplier.

And the prospect of up to 42 billion barrels prompted more than 40 oil firms to stake a claim.

Yet it is Libya’s 53 trillion cubic metres of untapped natural gas reserves which could have the biggest impact on families here, where dwindling North Sea supplies have seen the UK become a net gas importer for the first time in a generation.

Much has come from stable countries like Norway but, increasingly, we are having to import from further afield and more dubious sources such as Russia. A UK Financial Investments Ltd report before this week’s unrest said Britain could be importing gas from Libya in as little as five years.

John Hamilton, a Libya expert with analysts Cross Border Information, said: “Obviously oil is important but I think Libya, if it turns out to have large reserves of gas, will be a major player in European gas supply.”