Libya to Investigate 'Every Penny' in Oil Graft Probe

Libya's new government vowed on Thursday to investigate "every penny" of suspicious oil contracts signed under the former regime, responsible for what it described as "unbelievable" corruption.

"Any corruption under the previous regime will be investigated... There will be specialized committees that will look into all these contracts and agreements starting with the oil sector," the National Transitional Council's oil and finance minister, Ali Tarhuni, told a news conference in Tripoli.

He did not give details of specific contracts or companies under suspicion and said that, due to the ongoing conflict, the investigation had yet to begin.

Tarhuni said the NTC would publish details of past contracts at the end of next week, and promised to turn a leaf on the practices of Moammar Gadhafi's regime.

"There was an unbelievable amount of corruption. What the size of this corruption was is the question. We will investigate every penny openly and transparently," the minister insisted, adding the interests of Libya's people would be paramount in future contractual negotiations.

The oil-rich North African country's formerly pariah status drove many international oil companies out in the 1980s, but they flooded back in after UN sanctions were lifted in 2003 as part of Gadhafi's rapprochement with the West.

Tarhuni said on Wednesday that Libya would not award any further oil contracts until an elected government had been formed.

Punitive economic sanctions were reimposed in February and March, when Gadhafi launched a violent crackdown on pro-democracy activists.

Tripoli hopes to raise the country's oil production, which collapsed after the February uprising, from current levels of about 400,000 barrels per day to pre-conflict levels of around 1.7 million bpd by the end of 2012.

The International Monetary Fund official has said it would take more than 12 months for Libya to achieve those output levels.

The president of the state-run National Oil Company, Nuri Berruien, estimated on Thursday that 10 percent of the OPEC country's oil infrastructure had been seriously damaged during the eight-month conflict.

But he insisted it was possible to repair the damage within a year, and at affordable costs.

"We're talking hundreds of millions, not billions of dollars," Berruien told Agence France Presse.

The oil infrastructure along the Mediterranean coast between Sidra and Brega was a key battleground at the height of the conflict, as the mainly rebel-held east and mainly government-held west fought it out.

Berruien singled out Sidra's export terminal and the Messla oil field as two areas of the industry hit by the violence.

Also on Thursday, Libyan gas supplies to Italy through the Greenstream pipeline resumed, following an eight-month hiatus.

Berruien said only "limited" exports had begun, but that these would rise to "official" levels by the end of November, or early December, so long as Libya was able to meet its domestic needs.