Transparency from the ground up will help the oil-rich state.

With the rebel takeover of Tripoli recently, questions are swirling about how the new authorities will manage Libya’s significant oil and gas wealth. Pre-war Libya relied on oil and gas revenues for more than 80% of government revenue in 2010 and rebuilding the country and building new, democratic institutions will, for the foreseeable future, have to be on the back of these revenues.

The country has 44 billion barrels of proven reserves and companies are already knocking on the doors of the National Transitional Council (NTC) in order to get access to Libya’s hydrocarbon riches. As I explain further below, the NTC is also prepared to honor existing contracts with oil and gas companies. But the benefit to the Libyan people will depend on how these revenues are managed.

The “to do” list for Libya’s new leaders is long and daunting, but transparency is an obvious and important first step in Libya. The process for granting new oil licenses for exploration or production must be open, transparent and competitive. Current and new oil contracts must be publicly revealed. (Elsewhere in Africa, Ghana recently disclosed its petroleum contracts and you can download them at the Ministry of Energy website.) Foreign companies operating in Libya must also agree to disclose payments they make to the new government.

This is where a new US law comes in. Many companies planning to re-enter Libya will soon be required to report such payments as part of last year’s Wall Street Reform and Consumer Protection Act. The law orders the Securities and Exchange Commission to issue regulations that will require oil, gas and mining companies to publish the payments they make to governments around the world. Rather than fighting the new law, foreign oil companies looking to operate in Libya should see it as an opportunity to increase energy security and create better operating environments for energy companies. (After all, Senator Cardin and Senator Lugar originally pushed this bipartisan measure as standalone legislation – the Energy Security through Transparency Act.) As we have seen, the alternative – secrecy, corruption and conflict – is not good for companies or the citizens of resource-rich states.

According to TIME, the NTC has pledged to honor deals with BP, ConocoPhillips, Marathon Oil, Hess, Italy’s ENI and other companies. All these companies will be covered by the SEC rule. A final rule is expected in the next couple of months and can’t come soon enough for Libya and its citizens. In addition, the European Commission plans to issue draft legislation that will match or exceed US requirements this fall. The European Parliament endorsed this approach this week in a report that hailed the benefits of mandatory reporting requirements for the oil, gas and mining industries.

It will take some time to get the oil industry back up and running. According to African Energy an optimistic view is production reaching 1 million barrels a day in eight months, while consulting firm Wood Mackenzie estimates that it may take 36 months to reach full pre-revolution output of 1.6 million barrels a day. Libya’s new rulers should use the time to build a transparent and accountable system for managing oil wealth for all Libyans.