West is failing Libya: Rebel oil chief

Ali Tarhouni, Finance Minister of the Libyan opposition, right, talks to Australian Foreign Minister Kevin Rudd, left, during the third meeting of Contact Group on Libya. (AP)

Libya's rebel oil chief accused the West on Saturday of failing to keep up its promises to deliver urgent financial aid, saying his authority had now run out of cash completely after months of fighting.

Libya's economy relies on oil exports and the rebels have struggled to make ends meet as damage to energy infrastructure caused by the civil war has brought production to a halt in what used to be a major OPEC oil producer in North Africa.

Western powers are helping the rebels with daily air strikes against forces loyal to Libyan leader Muammar Gaddafi, and have promised to expand aid backed by Libyan assets frozen abroad.

Speaking to Reuters in a rare interview in the eastern rebel stronghold of Benghazi, oil and finance minister Ali Tarhouni said the cash had yet to arrive four months into the war.

"We don't have any (cash). We are running out of everything. It's a complete failure. Either they (Western nations) don't understand or they don't care. Nothing has materialised yet. And I really mean nothing," he said.

"All of these people we talk to, all of these countries, at all these conferences, with their great grand speeches -- we appreciate (them) from the political side, but in terms of finances they are a complete failure. Our people are dying."

The economy in east Libya is in tatters. The authorities are struggling to find cash to pay for military operations as well as salaries in a society where, thanks to the legacy of Gaddafi's centralised rule, most people depend on state wages.

Western states have offered to help. The European Union has pledged support and Washington, which took a leading role in securing a UN-backed no-fly zone over Libya, has promised more aid and offers of loans to keep the rebels afloat.

Asked why he thought it was taking Western nations so long to produce money, Tarhouni said: "No idea. ... I am tired of asking them."

He had earlier estimated the rebels were spending up to 100 million Libyan dinars ($86 million) per day. 

"I don't expect us to produce oil any time soon. The refineries have no crude oil, so they are not working," he said.

"People died for this revolution and are still dying. We will find a way (to raise money). One thing is for sure: We will never give up." 

Supplies of fuel, vital to keeping eastern towns supplied and maintaining the campaign against Gaddafi, are tight.

Tarhouni said that refineries, including the one in Misrata, and other crucial installations had been damaged by the fighting, but the pipelines were still intact.

Libya produced 1.6 million barrels per day before the war and exported about 1.3 million bpd. Rebels sold their first tanker full of crude to U.S. refiner Tesoro in April, but production has since ground to a halt due to concerns over the security of the oil fields. 

Rebels now rely on imports of fuel. Asked about the mechanism of deliveries, Tarhouni said: "We have signed (fuel supply) contracts and we have companies that were gracious enough to delay those payments for the future.

"We get it (fuel) basically from these contractors. I personally don't know where they get it from, but I think it's just from the spot market, most of it. The companies are international companies."

He said the rebel authority had put together a budget totalling 3.6 billion Libyan dinars ($2.98 billion). "But my immediate needs are much less than that. I can deal with whatever that I can have access to," he said.

Tarhouni said the rebel government was holding direct talks with foreign companies on future cooperation, adding that he had no qualms about dealing with those which had earlier worked closely with Gaddafi's government in the capital Tripoli.

Asked which companies he was talking to, he named Germany's Wintershall and France's Total.

"We need help, we said we respect and abide by all contracts. The only enemy that I have is Gaddafi and his killers and thugs," he said. "In terms of commerce and companies I have no enemies."

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