Libya pledged on Tuesday a probe of Gaddafi-era oil deals amid mounting pressure from the local industry in a move which analysts said could spread panic among foreign players and even delay the return to normal oil output.
Libya's oil and finance minister Ali Tarhouni told a news conference the country would set up a committee to probe the scale of corruption practised by the previous regime.
"The committee will scrutinise all contracts and projects to provide a view of the size of the corrupt dealing and all that emerges will be investigated and published," Tarhouni told a news conference.
During ousted leader Muammar Gaddafi's four decades of rule world oil many of the world's majors have either operated in Libya or signed oil deals with Tripoli.
Industry sources have long anticipated a wide-scale probe of oil deals by the new rulers in Libya, which may lead to a reallocation of some old contracts to reward countries which heavily supported the uprising against Gaddafi.
"Corruption probes are always going to be motivated by either legitimate concerns or a desire to appease popular pressure. We've seen a lot of pressure recently with protests outside the National Oil Corporation," said Henry Smith, Libya analyst at London-based consultancy Control Risks.
Workers protesting at the headquarters of Libya's National Oil Corporation on Sunday said they would strike until managers were replaced and possibly tried for fighting alongside Gaddafi.
"This points to the fact that the decision-making process might stall in Libya. People can panic and you can have institutional paralysis which can in turn have an impact on oil production," added Smith.
An analyst with another risk consultancy, who specialises on Libya but asked not to be named, said he believed the probe has always been among the biggest fears of oil firms present in Libya.
"It is what keeps them awake at night - an investigation into who paid what and threats that this information might be published. And if something gets confirmed then it could easily end up in courts in London," he said.
"And as political process in Libya evolves, those accusations will inevitably become part of it," he added.
Tarhouni also said Libya would in the future publish the details of all new contracts adding that the transitional government had not agreed on any new deals.
"The transitional government should not sign any oil contracts or deals with frozen assets because this should be done by an elected government," Tarhouni said.
He said the details of fuel purchases that had been made since the revolution would also be made available to the public.
"On the oil contracts, we bought we have decided to publish all of these as they were signed," he said.