Thursday, April 14, 2011

Western Oil Politics in Libya

Virtually every Western oil company with a strong presence in Libya has reacted the same way throughout the Libyan people's struggle against Moammar Gadhafi: with tentative silence. A recent article from Bloomberg Businessweek reveals that major oil companies are playing politically safe in Libya, not wanting a burn bridges with either Gadhafi or the new rebel government. 

In business, there is such thing as taking a temporary hit to profitability to invest in a stronger future by reaching out to customers in truly meaningful ways. To me, Western oil companies' wishy-washy reaction to political turmoil in Libya will only hurt them in the end. Oil companies seem to be uncertain of whether Gadhafi will remain in power or not, despite the consistent voice of the Libyan people, the unified cause of nations around the world and new EU sanctions on oil companies doing business in Libya. The problem is, oil companies seem to be completely ignoring the ethical and human rights implications of Gadhafi's possibly remaining in power. 

The best thing for these oil companies to do would be to treat the rebel government as if they are the only legitimate ruling party in Libya, helping to fund their political and military actions against the old regime in return for first rights on Libya's most lucrative oil fields. 

The links below will shed light on just how terrible of a partner Libya's old regime has been to Western oil companies over the last half-decade. In my opinion, oil companies should be just as vehemently opposed to Gadhafi's regime as the people of Libya. They are in a unique position to turn the tide of battle in the people's favor, securing a strong, positive reputation among the people of Libya for years to come, but they can't seem to see past short-term revenue impacts to understand the long-term value of becoming a major player in Libya's liberation. 

What other ways can Western businesses gain competitive advantages by supporting the Libyan people's struggle against a regime whose time has long expired?

Further Reading
Bloomberg Businessweek - Where Has Libya's Oil Gone?
Wall Street Journal - For West's Oil Firms, No Love Lost in Libya
Monsters and Critics - French, US, Canadian Oil Ventures in Libya Hit by New EU Sanctions