Exit the Colonel (30 page)

Elsewhere in the region, individuals with ties to Libyan opposition in exile noted that Gaddafi's confidantes had been alerted to a new campaign, the bare outlines of which sounded ominously like a repetition or reformulation of the Revolutionary Committees, a reactionary, not a progressive maneuver. On a more hopeful note, there were other rumors floating in these circles that Abdelsalam Al Jelloud was resurfacing, either to promote the new, obscure Gaddafi vision or to head off another disaster.
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During the period 2004–2010, many Western leaders had the opportunity to observe Gaddafi up close. Gaddafi's public persona was typically what might be described as animated. Some foreign diplomats and a few businessmen saw Gaddafi in a more indisposed state. Officials described him as looking heavily medicated, sedated, and puffy. Prolix in public, he could be stone silent for lengthy, uncomfortable periods in smaller groups. Gaddafi's behavior in 2009 and 2010 again led outsiders to focus on the question of whether he was fully in control of his actions, or whether he
was simply reverting to his usual antics. His UN General Assembly speech appeared to be within the range of vintage, provocative Gaddafi.

The accounts of various aides who tried to warn him of upcoming disaster, however, suggest he had retreated into a depressed or less than functional state, even prior to February 15, 2011. One source suggests that Gaddafi was “trailed on a weekly basis” by an Italian psychiatrist.
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Given the personality traits enumerated, we might question the degree to which the arm's-length response of the US and the West to Libya post-deal might have set Gaddafi off in ways to which the Western leaderships had not drawn connections: for example, Gaddafi, as he was wont to do, may well have taken local (New York City) refusals to allow him to pitch his tent in Central Park, or visit the site of Ground Zero, as grave insults, justifying subsequent rants and retributions. Tales emerged from Gaddafi's UN team about their desperate efforts to find a ground-floor, luxury accommodation in New York for Gaddafi's UN General Assembly visit—as no one would have him.
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In that same year—2010—there were some very strange signs, which in retrospect might have been harbingers of turbulence: Gaddafi's hints that he might consider nationalizing the oil industry—combined with lower price expectations for crude, made Western oil companies nervous. Diplomatic relations with the US had suffered a blow after the Wikileaks scandal and associated revelations. There were a couple of strange defections and rumors of vague new policy proclamations by Gaddafi, which seemed to suggest that he might be regressing in his plans for Libya's new orientation. In short, strange things were happening in Libya many months before the start of the Arab Spring. Many observers passed these off as par for the course, but the fact is that a number of diplomatic missions and oil companies started to draw down their staff until things calmed down.

In late 2010, a bolt from nowhere rocked US-Libya relations as 250,000 confidential, but not top-secret State Department diplomatic cables from 274 embassies were leaked in what was known as the “Wikileaks” scandal. Included were a series of cables written by US Embassy-Tripoli and USLO personnel about Gaddafi and the family dynamics, and Gaddafi's fears and foibles, particularly during his UN General Assembly visit to the US. The latter were credibly said to have infuriated Gaddafi, not only for the personal
insult, but likely more critically for his loss of face with his own people: so
this
was what the Americans really thought of Gaddafi.

As expected, the scandal unleashed a torrent of retaliatory measures. Ambassador Gene Cretz, the author of many of the cables deemed most sensitive, was rendered ineffective. A State Department official noted, “The Libyans made it clear he [Cretz] was unwelcome.” Cretz admitted to receiving a number of phoned death threats, and State Department officials noted that he was not the only one within the embassy so threatened. The State Department recalled Cretz to Washington for consultations in late 2011, with the expectation that he would remain there until another ambassador was appointed.
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Other countermeasures included the Libyan declaration of the then political reporting officer as persona non grata for meeting with members of the Berber community. As is always the case during times of strain in bilateral relations, visas became an issue. Once the officer had left, the department was unable to get a visa for a replacement. Effectively, Wikileaks had frozen US diplomatic activity with and within Libya, and created a situation reminiscent of US-Libyan relations in the early 1970s, just after Gaddafi's coup.

Beyond Wikileaks' immediate impact, the outside world and Libya's community were interested in the leaked documents, not only for the rare glimpse they provided of what American diplomats thought, but also how little they really knew—and how little they had learned since 2006. One section in the documents on Gaddafi could have been written ten or twenty years earlier:

One cable on the Islamist presence in Derna, quoted heavily in outside news reports and later used as evidence supporting a strong presence of Al Qaeda in eastern Libya, was in fact a summary of unconfirmed statements made by a dual US-Libyan citizen to the deputy chief of mission.
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Since 2004, there had never been a full complement of reporting officers within
the embassy, and events in the eastern part of the country were, as a result, still largely unknown. Other cables mentioned the names of longtime embassy contacts in the context of information that could reasonably be said to be prejudicial to their safety (though some said the lack of information helped exonerate them with those in the regime who suspected they were giving the Americans too much information).

The release of yet more cables further strained relations between the US and some of its better in-country sources, whose statements—and identities—could be guessed, even if the actual names were redacted. To these individuals, the State Department could only respond with weak mea culpas.

By December 2011, there had been talk for over a year about how disappointing the Libyan oil environment had proven, relative to the huge expectations that followed the opening of the EPSA IV rounds. The international media were full of panicked reports about Libyan oil in 2009. In one article headlined “Libyan Promise Falters,” its author wrote, “Five years after Libya reopened its oil sector to global participation, it has not matched its billing as a ‘new El Dorado.'”
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Increasingly, Libya was receiving press with titles such as “Libya: A Mixed Bag.”
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Gaddafi, perhaps inspired by Venezuelan strongman (and friend) Hugo Chavez, floated the idea of re-nationalizing parts of the Libyan oil industry—a major red flag.
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In early October 2010 came the announcement that American oil companies Chevron and Occidental Petroleum, after making no major new finds, were leaving or not extending the licenses for which they fought so vigorously in 2005.
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Verenex and Medco had made some finds in a zone called Area 47 while Shell, BP, and Exxon pushed on, betting on large-scale gas finds.
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Though barely reported, this news was explosive, given how much Occidental had invested in the Libya relationship since 2005. Also not extended were the licenses of Woodside Petroleum (Australia) and Liwa Energy (Abu Dhabi). A smattering of other international oil companies did extend their concessions, including the American company Amerada Hess, Brazil's Petrobras, Indonesia's Medco Energi, Oil India Ltd., and Algeria's Sonatrach. The US oil companies ConocoPhillips, Marathon Oil, and Hess were in much different positions, being partners with the National Oil
Company (NOC) in existing production (Waha, or Oasis fields). Various majors were saying that their expectations of strikes within Libya had been vastly downgraded. In all, foreign companies operating in Libya had discovered 2.16 billion barrels of crude oil and 7.87 billion cubic feet of gas in five years. Further, legislation governing Libya's oil industry had not changed much since the original law in 1955 and was very much out of line with current industry practice and technology.
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The business environment was also becoming less welcoming. In a relentless effort spearheaded by Matouk al Matouk, who was equivalent to a labor minister, the Libyan regime continued a campaign to encourage managers to hire unqualified Libyans and to appoint local Libyan general managers to run Libya-based operations. Obtaining visas was a problem as well.

Other disconcerting events in 2009 included the establishment of the Supreme Council for Energy Affairs, which stole the power from NOC to negotiate contracts and set production and development targets. While NOC head Shukri Ghanem was sent out to promote this development, describing it as a “positive” event, Prime Minister Baghdadi Ali Mahmoudi, and Saif 's brother Mu'tassim were to oversee this new authority,
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further ensuring that contracts were upheld. Many found this situation far less comforting, as it suggested direct interference by Mu'tassim in the oil ministry policy and budgets (which did happen), even with Ghanem officially at the head of the NOC.

Some of the oil companies' frustration had to do with a structural preference on the part of the Libyans, which affected both Libya's ability to make a profit and the oil companies' ability to sell. Due to wear and the lack of replacement or repair resulting from the sanctions, Libyan fields were old and poorly functioning, losing production capacity precipitously. The incentives for the Libyan government motivated it to push for exploration contracts, EPSA (Exploration and Production Sharing) agreements, at the expense of existing fields. Despite the rumors of imminent development, exploration and production-sharing agreements (DEPSAs—contracts focused more on developing existing capacity), these never materialized, and Libya's overall oil infrastructure capacity continued to decline. The problem rested with the culture of corruption and an institutionalized stinginess: intermediaries needed their palms greased, which was far easier with earlier EPSA contracts that allowed for large bonuses.

In its annex to the NES, Cambridge Energy Research Associates (CERA) exhorted Libya to invest deeply and quickly in production capacity
in order to take advantage of a relatively short window of higher prices. In a speech, Daniel Yergin, chairman of CERA, commented:

In 2006, many analysts like Yergin believed oil would soon rise above $100 a barrel. By 2007–2008, the oil industry anticipated a different scenario, that of an oil and gas glut, provoked by the emergence of natural gas, superseding oil. Simply put, regardless of the oil in the ground in these fields, the economics of oil looked very different in 2010, compared to 2006.

Though many of the nuisances described may have contributed to the overall annoyance factor of work in Libya, we cannot discount the possibility that insiders had become increasingly alarmed about some aspect of Libya's risk profile, perhaps related to issues of succession or corruption. Given that most of the same big oil companies were in Saudi Arabia, it is conceivable that the Saudis had inside information about Gaddafi's internal rivalries and had warned off the American companies. Whatever the case, the Western oil companies were watching internal schisms with keen interest. A Reuters reporter wrote in November 2010:

Just as the diplomats' and oil executives' antennae had been raised, an unusual event occurred, which had many outside Libya guessing what exactly was happening within Gaddafi's inner circle.

In November 2010, Nouri Al Mismari, Gaddafi's longtime chief of protocol, left Libya for France on the pretext of treatment for an allegedly chronic ailment. Mismari had handled the logistics for Gaddafi's international visits and speeches for more than twenty years and knew most of his secrets. It is
unclear if regime charges of embezzlement against Mismari had been prepared before or after he fled.
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Not surprisingly, the circumstances behind Mismari's departure are obscure. There were rumors that Mismari and Mu'tassim Gaddafi had crossed swords sometime after 2004 about a business deal, that the latter had had Mismari's son killed in 2007, and that Mismari, despite having benefited financially from his work for the Gaddafis, such that he could afford “a luxurious home in France, fancy sports cars and jewels,” had been biding his time for an opportunity to deliver a counterpunch.
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Meanwhile, about the same time, late November to early December, Saif was said to have returned to Libya.