As world’s leading powers jostle to benefit from oil and economic reconstruction contracts, to be handed out by a new, rebel-led government in Tripoli, some major competitors are being elbowed out of the ongoing tussle. Politics continues to dominate!

As Qaddafi’s 42 years old reign crumbles, oil majors — desperate to unlock some of the biggest oil and gas riches in the world — are positioning themselves for the choicest grab. Libya holds more reserves than any other country in Africa with more than 40 billion barrels of “black gold. “ The real reason behind the get Qaddafi campaign is out in open, some now believe.

As soon as the news of rebels entering and capturing Bab-Al-Azizia residence of Qaddafi began to spread, Italy’s largest oil company, Eni SpA did not miss out on time and immediately sent a technical team to assist in the resumption of Libyan operations, Italy’s Foreign Affairs Ministry said last Monday. “Eni has sent a technical team to Libya,” a spokesman for the ministry said. Eni appeared in real hurry!

Houston-based Marathon Oil Corp. too has had “preliminary discussions” with rebels over the condition of facilities where it has interests, with a goal of making a plan to restore production, a company spokesman announced in the immediate aftermath of the rebel push.

A BP spokesman too underlined the company was committed to returning to Libya “as soon as conditions allow,” though it had no time frame. BP, Royal Dutch Shell, ENI, OMV, Repsol YPF SA and Total were among the Western oil companies operating in Libya before the war began.

Russian giant Gazprom, as well as China’s CNOOC and Sinopec were traditionally present in a dominant waybefore the outbreak of violence in the oil rich Libya. About 75 Chinese companies operated in Libya before the war, involving 36,000 staff in some 50 projects.  

However, the emerging power arrangement in Tripoli has already sent shivers down the energy leaders in Russia and China. To the fortune of the western oil majors, China and Russia — the two major players in Libya as yet — are now faced with the prospect of being sidelined.

They may now have to pay a price for staying cool to the rebels in the campaign to dislodge Qaddafi from power. China and Russia abstained too from voting for the UN Security Council resolution backing military action against the Qaddafi regime. Consequently the position of Russian and Chinese companies, seen reluctant at least until recently to place their full weight behind the rebel movement, appears tenuous — to say the least.

Rebels for now, are promising to honor all the business contracts that were signed between investors and the Qaddafi regime in Libya and have even requested Beijing’s assistance in the reconstruction process.

Yet rebel leader Mustafa Jalil also maintains that the NTC would favor governments which extended their support to the rebel movement over those which did not, placing China and Russia in an ambiguous, if not disadvantageous position.

“We don’t have a problem with Western countries like the Italians, French and UK companies. But we may have some political issues with Russia, China and Brazil,” Abdeljalil Mayouf, information manager at Libyan rebel oil firm AGOCO, told Reuters earlier last week.

The comments signal a potential setback for countries which resisted tough sanctions on Qaddafi or pressed for more talks and would let European and US companies capture billions of dollars worth of oil exploration and construction contracts in the new Libya, without real competition from Beijing and Moscow, many now feel.

And consequences are getting apparent. China’s largest oil and gas producer Great Wall Drilling Co (GWDC), a subsidiary of the state-owned giant China National Petroleum Corp (CNPC), has already announced shutting down six major projects in war-torn Libya, Syria and other restive nations because of political instability. In past weeks, some 36,000 company workers had to be evacuated from Libya due to the instability and war.

And this is despite the fact that China had been attempting to hedge its bets against Gaddafi’s ability to survive, hosting rebel leaders in Beijing on several occasions in recent past. Although Beijing preferred a policy of non-interference during the crisis, China’s Foreign Minister Yang Jiechi hosted senior rebel leader Mahmud Jibril in Beijing last June and recognized Libya’s opposition as an “important dialogue partner.”

However, after the outburst that Chinese oil companies could lose out in the wake of Qaddafi’s removal from the scene, Beijing acted swiftly urging the new Libyan power brokers to protect its investments.

Wen Zhongliang, the deputy head of the Chinese Ministry of Commerce’s trade department made the admission: “Due to the changes in the Libyan situation recently, our investment activities in Libya have been impacted,” yet he also underlined, “China’s investment in Libya, especially its oil investment, is one aspect of mutual economic cooperation between China and Libya, and this cooperation is in the mutual interest of both the people of China and Libya.”

He then added, “We hope that after a return to stability, Libya will continue to protect the interests and rights of Chinese investors and we hope to continue investment and economic cooperation with Libya.”

Russian companies, including Gazprom and Tatneft also face losing out on projects worth billions of dollars in Libya. “We have lost Libya completely,” Aram Shegunts, director general of the Russia-Libya Business Council, told Reuters. “Our companies will lose everything there because NATO will prevent them from doing business in Libya.”

Brazilian firms Petrobras and construction company Odebrecht were also in big business in Libya. And their position under the new regime in Libya is under cloud too.

Much has changed in Libya — over the last few weeks or so. The energy industry is no exception. The Libyan political tsunami is resulting in re-alignment of players.

New players are emerging as dominating force. Big support to rebels from Qatar as well as oil trader Vitol, neither active in Libya before the war, may now be guaranteed a chunk of reserves as influence is passed on to new players — at a cost to the already established players there. “Qatar will be a big player. Vitol might be an important one. Shell is also looking to boost its role,” a Western risk consultant with knowledge of negotiations was quoted as saying.

Industry observers believe Eni and Total would emerge as the big winners in post-war Libya due to their countries’ heavy support for the rebels — at the expense of Chinese and the Russians.

Competition to secure a foothold in the new Libya is getting intense. Traditional Libyan friends, allied to Gaddafi, now face elbowed out of the prized assets of Libya, as new players make their print on the emerging picture. This is politics — some win, some lose. And energy is too closely entwined to politics — one can’t deny.

NATO may have won this round of battle, yet the war is far from over. It continues, at other places, on other fronts!