There is a low but rising risk that Libya will split following news that Colonel Muammar Gaddafi has been killed by National Transitional Council forces, while some contracts with foreign companies made in his tenure will be torn up, says Exclusive Analysis, an intelligence firm.

However, the death of the deposed Libyan dictator does not alter the risk profile of businesses that used to operate in the country or which wish to enter it. Also, the risks to individuals have not altered, the firm said in a report.

Differences within the NTC will come to the forefront after the capture of Sirte, the firm’s report said. “The NTC is likely to disagree on how to allocate oil and gas revenues, the power of the central and provincial government and the ability of the provinces to contract foreign firms for infrastructure and oil projects,” it said.

“Small-scale fighting is likely to take place in the run-up to and following the drafting of the constitution,” it said.

As far as the wealth management sector is concerned, the demise of Gaddafi has been watched as Libyans concerned about their wealth have sought to place money overseas, raising questions about its legitimacy. In the wake of the so-called “Jasmine Revolution” sweeping parts of North Africa and the Middle East, it has been predicted that billions of dollars will migrate from affected countries, such as Libya, Tunisia and Egypt, to safe havens such as in Switzerland, Singapore and London. In the case of former Egypt president Hosini Mubarrak, accounts held by his sons have been frozen in Switzerland.

The rise in geopolitical risks in the MENA region, coupled with fears of a eurozone breakdown, have pushed political and other risks up the financial agenda.

In its assessment of the Libyan situation, Exclusive Analysis said: “there is a low but increasing risk that Libya will split, raising risks of collateral damage to Sirte basin oil assets and contract revisions”.

“A key indicator will be agreement over the authority of the National Oil Company over regional state-owned or partly state-owned firms, such as the Arabian Gulf Oil Company, Waha Oil Company and Sirte Oil Company. Secession would become more likely if the former rebels in north-western Libya fight one another using heavy weaponry for two or three months and if squabbling over a new constitution drags on for many months after elections,” the report said.

“If no agreement is reached over these issues, and if the former rebels of Misurata, Zintan and Tripoli fight one another, there would be an increased risk of eastern Libya (Cyrenaica) choosing to secede. This region has traditionally had a separate identity to north-western Libya (Tripolitania) and could be economically self-sufficient. If eastern Libya secedes, the coastal area around Sirte, which includes the oil towns of Sidr, Brega and Ras Lannuf, would likely see most of the fighting to demark the border line and for control of the Sirte basin oil fields, such as Waha, operated by ConocoPhillips, and Raguba,” the report said.

Exclusive Analysis added: “It is unlikely that fighters from the east or the west would be able to reach the major population centres of the other side, indicating that risks to airports and ports in Tripoli, Misurata and Benghazi in such a scenario would not rise significantly. If Sirte falls firmly into the east's hands, this would indicate much lower risks of collateral damage to oil fields such as Sarir, Bu Attifel and other fields around Awjala and Jalu, where companies like Wintershall, Shlumberger and Eni operate. Revisions of Gaddafi era oil contracts would be very likely under this scenario.”