The release of the Lockerbie bomber triggered speculation that British energy companies trying to access Libya's oil wealth could soon hit a bonanza. But in reality, Big Oil is already there, and its interest in Libya is cooling.

The initial enthusiasm that accompanied Libya's first rounds of oil licensing -- held soon after international sanctions were lifted in 2004 -- has worn off, a casualty of arbitrary laws, Draconian contractual terms and Byzantine bureaucracy.

Since...