Libya War Prompts Chavez, Arab Mediation Offer Amid Attacks

The Arab League said it’s weighing an offer by Venezuela’s Hugo Chavez to mediate in Libya’s civil conflict, as his ally Muammar Qaddafi struggles to break out of his Tripoli base and regain rebel-held parts of the country.

The Arab League is holding talks with Venezuela on sending mediators to Libya, said Hesham Youssef, chief of staff for the group’s Secretary General Amr Moussa, by phone today. Venezuela is also in talks with other countries, he said, without giving further details.

The Venezuelan president and Qaddafi have spoken about the proposal, Venezuela’s government said. U.S. State Department spokesman Philip J. Crowley, while not ruling out talks, said if Qaddafi’s “not responding to the many calls across the international community for him to step down, it’s uncertain to me what an international commission is going to accomplish.” Oil fell from a 2 1/2-year high on news of the initiative.

Qaddafi’s air force resumed attacks today on rebel-held Brega on the Gulf of Sidra, where army deserters secured oil facilities, the Associated Press said. The eastern town was fought over yesterday, with the government seizing control before losing it again to insurgents. Rebels retained control of the western cities of Zawiyah and Misrata, near Tripoli, against loyalist attacks, the AP said. People in Zawiyah were preparing today for an assault from pro-Qaddafi units reported to be massing to the east, AP cited a resident as saying.

Source: Khaled Desouki/AFP/Getty Images

Arab League chief Amr Mussa. Close

Arab League chief Amr Mussa.

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Source: Khaled Desouki/AFP/Getty Images

Arab League chief Amr Mussa.

In Washington, President Barack Obama called anew for Qaddafi to “step down from power and leave,” and said the U.S. is sending military and chartered civilian aircraft to help repatriate foreign workers who fled Libya to Tunisia and Egypt.

U.S. Military Options

Speaking at the White House, he said the U.S., along with NATO allies, is looking at a “full range” of military options. He said the U.S. needs options ready to use quickly if necessary, noting the “danger of a stalemate that, over time, could be bloody.”

Opposition leaders called for international air strikes on Qaddafi’s forces, while U.S. Defense Secretary Robert Gates said yesterday that setting up a no-fly zone over the North African country would be a “big operation” requiring the bombing of its air defenses. China joined Russia yesterday in signaling likely opposition to action by the United Nations Security Council to authorize a no-fly zone.

The Libyan leader and Chavez spoke two days ago about a plan to form a commission to address the situation in Libya, according to an e-mailed statement sent yesterday by Venezuela’s Information Ministry. Libya has accepted the use of a commission to help find a negotiated solution to the crisis, CNBC cited the Venezuelan government as saying.

Photographer: Miguel Gutierrez/AFP/Getty Images

Hugo Chavez president of Venezuela. Close

Hugo Chavez president of Venezuela.

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Photographer: Miguel Gutierrez/AFP/Getty Images

Hugo Chavez president of Venezuela.

Proposal for Talks

“I hope that we can have a commission of friendly countries formed in the coming days that will talk to both Qaddafi’s government and the opposition,” Venezuelan Foreign Minister Nicolas Maduro said yesterday, according to the Information Ministry. “We want to reach a peaceful agreement.”

Chavez said on Feb. 28 that the U.S. is “exaggerating” the situation in Libya to justify an invasion to gain access to the country’s oil reserves. He has historically had warm relations with Qaddafi, comparing him to South American liberator Simon Bolivar and hosting him in Venezuela in 2009 for a summit of African and South American leaders.

While the rebels hold the military advantage, Qaddafi’s regime is “not yet out of the fight, and a prolonged, violent struggle is shaping up,” said Jeffrey White, a defense fellow at the Washington Institute for Near East Policy and specialist on the region. “Both sides lack the offensive capability to bring the conflict to a rapid conclusion,” and an extended conflict will “increase pressure for external military intervention,” he said in a report on the group’s website.

Oil Slides

Crude for April delivery slid $1.21, or 1.2 percent, to $101.02 a barrel at 1:31 p.m. on the New York Mercantile Exchange, the biggest drop since Feb. 11. Prices have risen 25 percent in the past year.

Gulf shares extended declines, with Dubai’s main index dropping 1.6 percent, bringing the decline to more than 17 percent since Tunisia’s president was ousted Jan. 14.

Qaddafi and some of his sons are being investigated by the International Criminal Court on suspicion of committing crimes against humanity during the unrest, Chief Prosecutor Luis Moreno-Ocampo told reporters at the court in The Hague today without giving the sons’ names.

Libya has no future with Qaddafi in power, U.K. Prime Minister David Cameron’s spokesman, Steve Field, said today in response to questions about Chavez’s offer to mediate.

Qaddafi Must Go

Qaddafi “has lost credibility and authority in that country, and we find it very difficult to see a solution that involves him staying,” Field told reporters in London today.

The conflict’s focal point moved eastward yesterday after earlier clashes close to the capital, Tripoli, where Qaddafi has retained control. Northeast of Brega, warplanes bombed an area near Ajdabiya, where the rebels have seized an army camp, and Al Arabiya television reported that 16 people were killed. The death toll from fighting in Brega rose to 14, the AP said, citing morgue officials.

Brega has Libya’s oldest refinery, which can produce about 10,000 barrels per day, and a gas liquefaction plant, according to the Arab Oil and Gas Directory for 2010. The state-owned National Oil Co. agreed with Royal Dutch Shell in 2005 to help restore the gas plant’s capacity to 3.2 million tons a year. Libya also has an export terminal for crude oil and refined products.

Libya allowed the Brega plant to “fall into decay over the years,” according to the publication.

Oil Output

Oil output in Libya, which holds Africa’s largest oil reserves, has dropped by as much as 1 million barrels a day since the unrest began, the International Energy Agency said yesterday.

Benghazi-based Arabian Gulf Oil Co. split from its state- owned parent, National Oil Corp., Al Arabiya television reported, citing unidentified Arabian Gulf officials. The split is temporary until Tripoli is liberated, the officials told Al Arabiya today. The proceeds of oil sales by Arabian Gulf won’t be accessible by the regime, they said, according to Al Arabiya.

The U.S. and other countries are seeking to evacuate their citizens from Libya and ease the plight of refugees, at the same time as they debate measures to end the fighting.

Two U.S. Navy warships with Marines aboard will arrive off Libya within a day or two for possible humanitarian operations, said Josh Diddams, a spokesman for the Marine Corps at the Pentagon. U.S. Chief of Naval Operations Admiral Gary Roughead said two aircraft carriers are already in the region and a third is preparing for deployment there from Norfolk, Virginia.

‘All Eventualities’

U.K. Foreign Minister William Hague spoke with General Abdul Fattah Younis, who resigned as interior minister on Feb. 23 to join the opposition in Benghazi, and told him Britain is working on contingency planning “for all eventualities, including a no-fly zone,” according to Hague’s office.

Any no-fly zone over Libya will need broad international backing, Hague and French Foreign Minister Alain Juppe said today in a joint news conference in Paris.

“The threat to bomb civilian populations is illegal, and we must prevent it from happening. That’s why we support planning on a no-fly zone,” Juppe said. “It can’t just be western countries. We need the participation of regional governments.”

More than 150,000 people have fled Libya to neighboring Egypt and Tunisia since Feb. 19, the UN refugee agency said on March 1. Thousands of foreign workers are stranded in Benghazi and on the border with Tunisia, New York-based Human Rights Watch said yesterday. The UN’s World Food Program called for “increased humanitarian action to prevent a disaster.”

Refugee Crisis

The British destroyer York arrived in Malta today with evacuees from Libya after delivering Swedish-donated medical supplies to Benghazi yesterday, the Ministry of Defense in London said on its website.

Planes chartered by the U.K. government have so far airlifted 800 refugees to Egypt from the border, Cameron’s spokesman said. The U.K. is aiming to transfer about 2,000 people a day to Egypt, he said. Britain has chartered three planes to take a total of 6,000 refugees from the unrest in Libya to Egypt, the government said yesterday.

The Libyan revolt is among regional anti-government demonstrations that have erupted in Yemen, Bahrain, Oman, Jordan, Algeria, Morocco, Iran and Iraq. In addition to the toppling of Tunisia’s leader, the popular uprisings have also led to the ouster of Egyptian President Hosni Mubarak.

Egyptian Resignation

Egypt’s ruling army council, which took power when Mubarak stepped down on Feb. 11, today accepted the resignation of Prime Minister Ahmed Shafik and invited former Transport Minister Essam Sharaf to form a government. Shafik had been the target of protesters who are urging a break with the old regime.

Tunisian interim President Fouad Mebazaa will call for suspending the constitution and dissolving parliament, Al Arabiya television reported today, citing unidentified people.

Yemen’s opposition coalition said today it has given President Ali Abdullah Saleh, in power for more than 30 years, a “road map” for a peaceful transition involving the ruler’s departure this year.

Governments throughout the region, including the royal family in Saudi Arabia, holder of the world’s biggest oil reserves, have announced increased spending on social programs, such as food and energy subsidies and job-creation plans, to assuage the unrest. The protesters are demanding moves toward democracy as well as higher living standards.

To contact the reporters on this story: Ola Galal in Cairo at ogalal@bloomberg.net; Mariam Fam in Cairo at mfam1@bloomberg.net; Alaa Shahine in Dubai at asalha@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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