SHOKRI GHANEM RETURNS AS CHAIR OF LIBYAN NATIONAL OIL

S E C R E T TRIPOLI 000862 SIPDIS STATE FOR NEA/MAG; STATE PLEASE PASS TO USTR; COMMERCE FOR NATE MASON E.O. 12958: DECL: 10/26/2019 TAGS: PGOV EPET ECON LY EFIN SUBJECT: SHOKRI GHANEM RETURNS AS CHAIR OF LIBYAN NATIONAL OIL COMPANY, LIKELY DUE TO SAIF AL-ISLAM'S POLITICAL ASCENDANCY REF: A) TRIPOLI 779; B) TRIPOLI 825 CLASSIFIED BY: Joan Polaschik, DCM, U.S. Embassy Tripoli, U.S. Department of State. REASON: 1.4 (b),(d) ¶1. (C) On October 26, international press reported that Shokri Ghanem had been reinstated as Chairman of Libya's National Oil Corporation (NOC). The head of NOC-owned Waha Oil Company, Dr. Bashir al-Ashhab, confirmed this report to Marathon General Manager, Steve Guidry (strictly protect),with al-Ashhab commenting that Ghanem had "returned from his extended holiday." Informed contacts believe Ghanem's return is directly linked to the recent appointment of his close ally, Saif al-Islam al-Qadhafi, to his new position as "General Coordinator." ¶2. (S) It remains unclear why Ghanem initially resigned. However, an embassy contact close to Ghanem told P/E Chief October 26 that three significant incidents influenced Ghanem's resignation: attempted solicitation of funds by Khamees al-Qadhafi; the three-day abduction of one of Ghanem's former NOC deputies in retaliation of a refusal to extort funds from the NOC; and a clash between Ghanem and PM-equivalent al Baghdadi al Mahmoudi involving the sale of land holding proven oil reserves to the state of Qatar. According to the contact, Ghanem had twice refused offers from the Libyan regime to take over al Baghdadi's position. ¶3. (S) Shortly before international press reported on Ghanem's return to the NOC, the contact predicted that Ghanem would return to political life, due the official appointment of Saif al-Islam, whom he has mentored for many years. However, some oil industry insiders in Tripoli believe that Ghanem and Saif al-Islam may have had a falling out over Ghanem's mishandling of the sale of the Canadian oil firm Verenex and his inability to force international oil companies to contribute to the claims compensation fund. ¶4. (C) Comment: Heads of international oil companies in Libya seem pleased by the return of Ghanem to the NOC. While they describe Ghanem as a shrewd businessman, they view him as more professional and market-oriented than Acting NOC Chairman Ali al-Sugheir, who represented a perspective within the NOC that favors re-nationalizing the oil companies. Ghanem's return may signify that reform-minded individuals will begin to take on significant roles in the Libyan system now that Saif al-Islam has entered the regime. We expect to see further personnel moves in the weeks to come, as Saif al-Islam defines his new role. End comment. CRETZ