Something quite profound happened in Libya at the end of November 2007, in my opinion, that may have ramifications across the oil producing world. There was a major shift in the rules of the game that govern the relationship between oil-producing and oil-consuming states.

Shukri Ghanem hinted as much when he said to the Libyan Jamahiriya Broadcasting Corporation that 'there are also basic changes in the contracting relations between the companies working in Libya and the producing companies'. Jonathan Stern, of the Oxford Institute for Energy Studies said to Reuters, 'Libya wants more share of the rent, and to that extent it reflects the changing balance of power.

I think 'basic changes in the contracting relations' and 'changing balance of power' are the key phrases here. Remember that oil is the axel on which Libya's modern world rotates. Modern Libya - economically - has been all about oil. Therefore it goes without say that Libya has an important relationship with oil companies that play an important role in extracting its oil which represents 90% of its export revenue.

What struck me about the announced agreement of November is the process itself. It was in great contrast marked by the lack of friction and tension. Not a coup d'etat or a bullet fired in anger. Not a demonstration against foreign companies in sight.

There was no posturing, stirring of emotions or the politicization of the process. In fact, the public at large had almost no knowledge that anything so major was being discussed on their behalf behind the scenes.

The whole process was totally de-politicized, involving hard behind the scenes negotiations of figures, analyses, forecasting, markets, and intuitive thinking.

This subdued matter of fact technical and administrative negotiating process reflects a new confidence and maturity by Libya as a nation. Libya can talk on equal terms to the West and the developed world in the language of logic, reason, national interest, economics, finance, market forces, demand and supply.

Libya can prove and has proved - in my opinion with this agreement - that it does not only operate on one or certain levels. Libya does not only talk the language of passion, emotion, politics, ideology, nationalism, colonialism or neocolonialism – which it has the right to do. Nor does it only talk the language of sometimes blind, hysterical fear of foreigners.

Equally, from a historical perspective, this deal reflects a complete reversal of the dominant position held by the so called concession holders that had been dominant up to the late 50's and has been slowly eroding since the formation of OPEC in 1960.

Historically, the OPEC states generally had to fight hard to gain sovereign control over their natural resources in order to rebalance the terms that had been imposed on them by the then 'Seven Sisters'. Iran's democratically elected nationalist Prime Minister Mohammad Mossadeq was overthrown in a coup d'etat backed by the British and American governments for wanting a bigger share of Iran's oil.

I therefore commend those who were behind this historic work. I don’t think the public at large appreciate the long-term ramifications of this agreement on Libya's political, economic and social future stability.

By calm, quiet behind the scenes negotiations based on the premise of mutual respect, equality and interdependence, a new deal was worked out. The smoothness with which the new deal was worked-out no doubt partly reflects an acceptance of the new status quo by the Oil Majors of the relatively stronger position of the oil producing states. It is also a reflection of the new market conditions. But to me it is also a vote of confidence in Libya's future and it tells us much that major oil companies want to be working and producing oil in Libya in 30 years' time.

It confirms that there exists an inflexible world demand for oil. It confirms the oil companies' thinking about the future oil market and anticipated demand and supply patterns. World oil supply has definitely proved itself to be inflexible. The world productive and processing capacity cannot be increased at the flick of a switch. It is clear to all that the demand is going to increase with the continued acceleration of the growth of economies such as China and India.

I hope that this sets a precedent and augers well for other Libyan future joint venture and FDI (foreign direct investment) projects. I hope that there is an end to the fear of foreign investment as a concept in some quarters in Libya. What can be concluded from the new oil agreements and the process itself is that Libya can guarantee itself its fair share in any business deal whilst maintaining a smile on its metaphorical face.

It also proves that negotiations and agreements with foreign companies must not be perceived as a win-lose (zero-sum-game) situation, but can lead to a win-win result. The results of these newly renegotiated oil agreements will by definition lead to mutually beneficial agreements and business relationships. The right type of FDI can be beneficial to Libya and Libyans for the transfer of knowledge and know-how.

Time and history will be the final judge of these agreements. But in my opinion these are historic agreements. These agreements help guarantee Libya's oil production, help Libya with its aim of doubling oil production and therefore income. Income for Libya's future and the Libyans of tomorrow.

Sami Zaptia can be reached at: www.knowlibya.net