The instability in the Arab world claimed its first oil-rich victim over the weekend with the uprising in Libya. That's bad news for the bevy of international oil firms that have set up shop in the cloistered North African nation over the years, most notably Eni, the Italian oil giant. Libya has become a hot bed of energy investment since the lifting of trade sanctions seven years ago. Major oil companies from BP (NYSE:BP) to ExxonMobil (NYSE:XOM) could now stand to lose millions, and in some cases, billions of dollars in investments and expected future revenue if the current regime falls.
Just a week ago it would have been unthinkable to suggest that Muammar Qaddafi could be ousted from power. The former army colonel, who seized power of the sparsely populated country in 1969 at the tender age of 27, had totally reshaped the country in his image. It would be impossible to mention the desert nation without some crack about its eccentric leader.
But suddenly over one weekend, Qaddafi seemed to lose his grip on power. Protesters set fire to government building and burned his likeness in effigy. The sheer speed of the uprising caught nearly everyone off guard. To put it in perspective, it took over a year of protests to oust the Shah of Iran in 1979. But in this new world of social media, revolutions seem to move at the speed of tweets.
Nevertheless, Qaddafi is determined to fight back, and unlike in Tunisia and Egypt, he seems to have no qualms in gunning down protesters en masse and even using fighter jets to bomb crowds. On Libyan state television yesterday, he showed his defiance, vowing to remain in the country "until the end."
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