East Libyans, who make up 25% of Libya’s population, are likely to seek control over oil fields in their region, accounting for 66% of the country’s entire production

Libya rebels

Eastern Libya is likely to declare itself an autonomous entity within a federal Libya, according to specialist intelligence company Exclusive Analysis.

It follows some eastern Libyans’ refusal of the proposed allocation of seats in the planned Constituent Assembly, due to be elected in June 2012, and the formation of a self-declared ‘Barqa’ (Cyrenaica) Army.

This information is unconfirmed and based on Exclusive Analysis’ assessment of political and violent risks in Libya.

Political and military leaders from the Libyan region of Cyrenaica indicated they would meet in the coming weeks and declare Cyrenaica (see map below) to be a self-governing entity with its own parliament.

Cyrenaica in Eastern Libya could claim independence

Source: Wikicommons

Cyrenaica in Eastern Libya could claim independence

In the event that Cyrenaica makes this declaration and implements it, contract risks will increase for companies with business in the area. It would also affect oil buyers worldwide becayse they would be uncertain as to who they ought to pay.

East Libyans, who by definition are 25% of Libya’s population, are likely to seek control over oil fields in their region, which makes up for 66% of the country’s entire production.

The event would have a severe effect on energy companies operating in Libya and infrastructure contractors, including in the aviation, power and water sectors.

If the Tripoli government contests Cyrenaica’s likely declaration of autonomy, war risks would be severe in the town of Sirte, where analysts expect eastern forces to attempt to form a defensive line. The Tripoli government is not expected to have the military capability to impose its will on Cyrenaica.