Libyan rebels besiege loyalist cities

Libya’s transitional leadership deployed its forces around cities loyal to Muammar Gaddafi, threatening to attack unless they surrendered and extending their search for the former leader.

Libyan National Transitional Council head Mustafa Abdel Jalil said yesterday its forces will pressure the cities of Sirte, Bani Walid, Jufra and Sabha until they give up while continuing to supply them with humanitarian aid. The rebel fighters said they will begin attacking Bani Walid today if the city doesn’t surrender.

“We are by the grace of God in a position of strength, capable of entering any city,” Jalil told reporters in Benghazi. The Misrata Military Council said it deployed its most powerful unit, the Halbus Brigade consisting of 500 men, around Bani Walid and it has observed that defensive positions held by government troops have been abandoned.

Since rebels captured Tripoli in late August, transitional authorities have been trying to restore stability, consolidate military gains and capture Gaddafi. More than six months of fighting to end the Libyan leader’s 42-year rule have reduced oil production and disrupted power supplies in the country with Africa’s largest crude reserves.

Restoring stability
Libya’s new leaders anticipate restoring the nation’s oil output “within a reasonable time.” The pace of restoring oil production rests on how soon oil companies return their workers, said Ahmed Jehani, minister for reconstruction in Libya’s transitional administration.

Companies with major investments in Libya include Italy’s Eni SpA, France’s Total SA and Marathon Oil Corp of the US, as well as Occidental Petroleum Corp, ConocoPhillips and Hess Corp.

The new leadership has extended by a week to September 10 the deadline for Gaddafi loyalists in his hometown of Sirte to surrender. Gaddafi vowed to fight on and turn the country “into a hell” in an audio recording broadcast by Syria-based Arrai satellite television.

Libyan oil production slumped to 60,000 barrels a day in July from 1.7 million barrels in January, according to the Paris-based International Energy Agency.

Storage facilities
There was little damage to infrastructure, Jehani said in an interview, and most of the required work involves restoring pressure to wells and cleaning sludge out of pipelines and storage facilities.

“Many of our fields are concessions held by international companies, so they are the ones that have to do the work,” Jehani said. “We can’t do it for them. It depends on how fast they deploy back to the country.”

Russia “will discuss all issues” with Libyan authorities, Foreign Minister Sergei Lavrov said in Dushanbe, Tajikistan, yesterday when asked about Russian energy projects in Libya. Russia’s Foreign Ministry said on its website on Sept. 1 that it hopes the new Libyan leaders will honour previously signed contracts and agreements.

Prime Minister Silvio Berlusconi of Italy, the largest buyer of Libya’s energy output, this week said that Eni is aiming to re-open a gas pipeline between the two countries by October 15.

Jalil said the NTC would move its headquarters to Tripoli from Benghazi, and pledged to hold presidential and legislative elections within 20 months, according to Agence France-Presse.

Military base
While opposition supporters now control most of Libya, Gaddafi has avoided capture. The former rebels believe he may be in one of their three key targets: the coastal city of Sirte, 280 miles (450 kilometers) southeast of Tripoli, Bani Walid, which lies 90 miles southeast of Tripoli, or Sabha, home to a major military base about 400 miles south of the capital.

Earlier this week, leaders of the international coalition that helped topple Qaddafi pledged economic and military support to Libya’s new administration as the former strongman vowed a long insurgency against his opponents.

A group of about 60 nations, called the Friends of Libya, agreed at a meeting in Paris to release billions of dollars in frozen funds for humanitarian and reconstruction needs. The meeting underscored the urgency of maintaining momentum following a five-month allied military effort.

The next meeting will take place in New York “on September 20 or 21,” Italy’s Foreign Affairs Minister Franco Frattini said.

Since the rebels have taken hold of Tripoli, Qaddafi has been on the run.

Some members of his family were taken to Algeria by a team of 35 former South African special forces, who were paid $15,000 each for the operation, Johannesburg’s New Age newspaper reported, citing an unidentified person who declined a request to take part in the mission.

Jalil said that Gaddafi “is still a threat” and that he welcomes the support of the North Atlantic Treaty Organization.

The one-day Paris meeting marked a shift from backing rebel aspirations to supporting the new leaders of Libya as they try to establish order and restore their economy.

The urgent unfreezing of Libyan government assets is prompted in part because it may be a year or more before full resumption of oil exports. Shokri Ghanem, Libya’s former top oil official who defected earlier this year, said he doesn’t expect production to return to pre-conflict levels of more than 1.5 million barrels a day until the end of 2012, according to today’s issue of Petroleum Intelligence Weekly.