UPDATE 2-Russia accuses Libya of training Syrian rebels

Wed Mar 7, 2012 10:28pm GMT

Keib also spoke about the challenges facing Libya as it builds a democracy. He said that now was not the time for Libya's eastern Cyrenaica province, home to most of the country's oil, to be pushing for greater autonomy.

Several thousand delegates in the eastern city of Benghazi announced on Tuesday that they were setting up a council to run Cyrenaica - birthplace a year ago of the rebellion that ousted Gaddafi - in defiance of the government in Tripoli.

The National Transitional Council (NTC), the body internationally recognized as Libya's post-Gaddafi leadership, is already struggling to assert its authority over militias and towns which pay little heed to Tripoli.

"This is not the time. I know some of the people who are doing this ... I guarantee you, this is a minority," Keib told the International Peace Institute.

Moves toward greater autonomy in the province may worry international oil companies because it raises the prospect of them having to renegotiate their contracts with a new entity.

Cyrenaica stretches westwards from the Egyptian border to the Sirte, half-way along Libya's Mediterranean coastline. When Gaddafi came to power in a military coup in 1969, eastern Libya was sidelined for the next four decades. Residents complain that they have been denied a fair share of the country's oil wealth.

Keib said the government plans to decentralize operations with offices in Benghazi and Sahba and move departments to different areas of the country, adding that once democracy had been established "if the people decide they want to have a federal government and different states then that's their call." (Reporting by Michelle Nichols; Editing by Eric Beech)

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