Libya confounds the many sceptics

When the rebellion against Muammer Gaddafi erupted last year, few gave the opposition movement much of a chance. The popular view was that the rebels were a disorganised tribal rabble who could not hope to demolish the Libyan leader’s supposedly coup-proof regime.

A year on, and not only have Col Gaddafi and his henchmen been consigned firmly to history, but Libya’s subsequent transformation has continued to defy the sceptics. Last weekend’s general election – the first real poll to be held in the country – was another encouraging sign. It went off largely without incident, with turnout high and violence minimal. Thus far at least, there seems to be little evidence of fraud.

The result, too, bucked a regional trend: that of Islamist parties triumphing at the polls. The Alliance of National Forces, a coalition of ostensibly liberal groups under Mahmoud Jibril, appears to have scored a resounding victory – at least in the competition for the 80 seats out of 200 in the general assembly that are awarded to parties under a list system.

While that does not guarantee them an overall victory – the remaining 120 seats are reserved for those standing as independents – it makes such an outcome considerably more likely.

But whatever the final balance of seats, Mr Jibril’s success is welcome, not least because he fought the campaign not on a platform of loose slogans but on a detailed programme of economic and political reform. Whatever government is eventually formed in Tripoli, this will hopefully colour the complexion of policies it pursues.

Even more than its neighbours in Tunisia and Egypt, Libya does not have the luxury of contemplating a long debate about women’s role in society or the political status of religion. Its urgent need is for a restoration of security.

Since Col Gaddafi’s fall, the biggest risk has been that the country might splinter into a patchwork of militia-dominated territories. The baleful example of northern Mali – which is a casualty of the fallout from Libya’s revolution – shows what can happen when ungoverned spaces and private armies are allowed to proliferate. Even now, the possibility of such chaos descending on Libya proper cannot be wholly discounted.

The first priority for the next government must be to inculcate a sense of national purpose, and to build a stable polity in which everyone feels that they have a stake. This means addressing the task of standing down the militias and integrating at least some of their members into an organised national defence force. Only when this is done will it be possible to unlock the interest of foreign and domestic investors. This in turn is vital if Libya’s post Gaddafi advance is to be consolidated.

Source: Financial Times

Libyan expats cast votes in historic poll

The first votes in Libya’s elections were cast in Dubai on Tuesday as expatriates turned out to select a national assembly less than a year after the collapse of the Gaddafi regime.

The polling station in the Libyan consulate in Dubai opened at 9am local time with other locations in Jordan, Germany, the UK, the US and Canada scheduled to open their doors every day until July 7, when the elections are set to be held in Libya itself.

Burhaneddin Muntasser, regional manager for an Swiss-based IT company who lived through the war in Tripoli, was overcome with emotion after casting his vote.

“I want a Muslim country, with a free economy, where the Libyan citizens come first,” said the 48-year-old, tears streaming down his face. “I am hopeful of a good future for Libya, but I am not 100 per cent confident.”

The 200-member national assembly will select a prime minister, draft laws and appoint a committee to write a new constitution.

A steady stream from the 3,000 Libyan residents of the United Arab Emirates were ushered through an air-conditioned tent at the consulate for their first elections in half a century, leaving with a purple ink print on their index fingers to prove they had already voted.

Aref al-Nayed, the outgoing Libyan ambassador to the UAE, said the historic day was imbued with a sense of “sad joy.”

“There is joy at reaching this stage in the long struggle of the Libyan people, but sadness from the great sacrifices of the people who made this possible,” he said.

Mr Nayed, who will return to the private sector after representing Libya in the UAE since the revolution that overthrew Colonel Muammer al-Gaddafi last autumn, said he was optimistic that the elections would install a representative government and produce a constitution reflecting the desires of all Libyans.

Fears have grown that the elections could be affected by outbreaks of violence as armed militias that helped ousted the former regime compete for power.

On Sunday, armed groups demanding more autonomy for the east burned election materials and damaged computers in the eastern capital of Benghazi. But Mr Nayed said the following day the people of Benghazi had taken to the streets to pledge their support for the electoral process.

“This is a self correcting revolution, I am always assured by the ability of the Libyan people to protect and correct the situation,” he said.

Awwab Abdul, a 23-year-old oil trader, was born in the US and lived in Dubai for 13 years, but, despite only living briefly in Libya, he was one of the first to turn out to vote at 9am.

“Over the next year, Libya will emerge as a special new capital of the world,” he said. “For us, freedom is the most important thing.”

Source: Financial Times

Libya Seeks U.S. Investment in Areas From Oil to Tourism

Libya is seeking to boost its oil production by a third to 2 million barrels a day by year-end, surpassing last year’s pre-conflict level, Libyan ambassador to Washington Ali Aujali said.

How fast Libya returns to pre-war levels or surpasses them “depends also on the oil companies, how fast they are returning” to restart or expand operations, Aujali said, speaking at a Bloomberg Government breakfast in Washington yesterday.

Beyond oil, Libya is eager for American investment in tourism, health care and education, he said. The nation, whose governance is still in flux, plans to hold the first election for the national assembly next month after four decades of rule by dictator Muammar Qaddafi.

“The environment is great” for U.S. companies, in large part because the Obama administration is credited by Libyans with pressing for NATO military action that helped topple Qaddafi last year, Aujali said.

“They appreciate what the Americans did,” he said, and American flags are often flown alongside Libyan ones around the country.

Libya’s governor for OPEC, Samir Kamal, set expectations lower than Aujali did, telling reporters last week in Vienna that the government hopes to reach 1.6 million barrels a day by year-end.

Aujali said the North African nation has restored crude oil production to more than 1.5 million barrels a day, or 90 percent of official production figures before Qaddafi was ousted in a violent uprising. The months-long conflict sent production levels plummeting to 45,000 barrels a day in August, according to a monthly Bloomberg survey of oil companies, producers and analysts.

Rising Output

Libyan production was restored to 1.45 million to 1.55 million barrels daily by the end of May, according to figures from the Organization of Petroleum Exporting Countries.

Oil Minister Abdul-Rahman Ben Yezza said last week that Libya plans to spend about $10 billion to develop long-term oil and natural gas projects and increase its crude production capacity. He said the country also has a five-year plan to increase production to about 2.2 million barrels a day.

Aujali said “we need more investment” to develop the oil industry and fulfill a longer-term goal of restoring Libya’s crude production capacity to its historical high. The U.S. Department of Energy estimates it exceeded 3 million barrels a day in the 1960s.

Aujali cited ConocoPhillips (COP) (COP), Exxon Mobil Corp. (XOM) (XOM) and Occidental Petroleum Corp. (OXY) (OXY) as among U.S.-based multinational energy giants that have returned to Libya, and urged other U.S. companies to invest in all sectors of Libya’s economy.

American Opportunities

American companies need to “be more involved, to be more aggressive to visit Libya to see where they can make business,” he said, so they don’t lose opportunities to other countries such as Italy, which has been proactive in seeking business prospects.

Aujali cited health care, infrastructure, education and tourism as sectors in which the Libyan government is seeking foreign investment. He said tourism remains one of the least- developed industries, citing Libya’s 2,000 kilometers (1,243 miles) of beaches and its cultural attractions, including Leptis Magna, one of the best-preserved Roman ruins in the Mediterranean,

Aujali said Libya is seeking American universities and hospitals interested in assisting with training and technology and setting up branches or partnerships, as many have done in the Persian Gulf and North Africa.

Unfrozen Assets

Libya is looking to the U.S. and NATO countries to help rebuild after a bloody conflict that cost the nation billions of dollars in lost trade and revenue, according to the International Monetary Fund. The revolution killed 30,000 people and wounded 50,000 others, according to the Libyan government.

“You supported this revolution at a critical time,” he said. Still, “the new road is not built,” so the U.S. needs to stay involved to ensure the democratic transition is completed.

The Obama administration has done everything possible to assist Libya’s government, including making available $31 billion in Libyan government assets under U.S. jurisdiction that was frozen as a penalty on Qaddafi’s government, Aujali said.

The only Libyan assets that remain frozen by the U.S. are about $3 billion belonging to the Libyan Investment Authority, the government-managed sovereign wealth fund and holding company based in Tripoli, he said. The authority needs to be reorganized under a dependable board of directors before “we feel safe” asking for the funds to be released, he said.

Election Plans

Libya has scheduled elections for July 7. Aujali said 145 political parties have formed, with 3,000 candidates vying for 200 legislative posts. About 80 percent of eligible voters have registered, underscoring excitement about the democratic transition, he said.

Still, the situation remains volatile, Mustafa Abdul Jalil, chairman of the National Transitional Council, said in an interview with state-run Qatar News Agency June 17. Libya risks descending into civil war if the current unstable security situation persists, he was quoted as saying.

Aujali said his country has studied other nations’ models for reconciliation and justice following long dictatorships during which many were persecuted. Libya is “not starting from zero. There are many with experience in the history and we learn from them.”

‘No Revenge’

While some members of the old regime are under arrest, “there is no revenge at the time being against the Qaddafi regime,” he said. “Reconciliation is important. But in the first place, justice has to be made.”

Aujali said he expects a speedy resolution of the “misunderstandings” in the case of a team from the International Criminal Court in the Hague that was detained June 7 by Libyan authorities. Libya accused Australian defense lawyer Melinda Taylor of trying to smuggle documents to Qaddafi’s son Saif al-Islam Qaddafi in a Libyan prison. The Libyan government accuses Qaddafi’s son of directing the killing of thousands during his father’s regime and during the rebellion.

“The Libyan people, they have the right before anybody else to try Saif al-Islam in Libya,” Aujali said of the effort to try him in the international court in the Netherlands.

Source: Business Week

Libya eyes refund of Goldman, SocGen losses

The Libyan sovereign wealth fund is investigating investment losses of $1.75 billion on structured products managed by Goldman Sachs (GS.N) and Societe Generale (SOGN.PA) to see whether it can claim compensation, the fund's chairman said on Wednesday.

Mohsen Derregia, chairman of the Libyan Investment Authority (LIA), told reporters in Milan that the LIA needed to review these investments and how they were managed.

"These were investments made in 2007 to 2008, and some of those losses are quite surprising. We've had losses for around $1.75 billion, of which $900 million was on a single investment with Goldman Sachs," Derregia said.

"We will have to see how these structured products were created, valued and managed. Then we will talk to the investment houses and see if we can claim a refund."

Asked what kind of structured products were involved, Derregia said: "It's not clear to me."

Goldman Sachs declined to comment and Societe Generale could not immediately be reached for comment.

Derregia was appointed head of the LIA in April and is sifting through tens of billions of dollars in holdings and investments made by the fund worldwide during the regime of Muammar Gaddafi, which was overthrown last year.

"To have a clear oversight of everything will take time; it won't be done in one or two months," Derregia said. "Clearly, there will have to be some write-offs, although they are not huge."

The total value of assets managed by the LIA (about $60 billion) had fallen by less than the LIA feared, Derregia added. "It's now midway between $50 billion and $60 billion. People in Libya feared we had lost 50 percent of our assets. It's not like that."

ASSETS SEIZED

Derregia was in Italy to speak to authorities and the financial community about the LIA's holdings in the country, which were seized in March by Italian financial police on the grounds that they belonged to members of the Gaddafi family.

The holdings, worth about 1.1 billion euros ($1.39 billion), include stakes in Italy's largest bank by assets, UniCredit (CRDI.MI), the oil and gas giant Eni (ENI.MI) and carmaker Fiat (FIA.MI).

The LIA has appealed against the seizure, saying that those holdings belong to the LIA, held on behalf of the Libyan government. Derregia and his lawyers said this view was backed by the Italian economy ministry's Committee of Financial Security, which he met on Tuesday.

The next hearing in the case is on July 12.

Derregia said that the LIA would keep its 1.8 percent stake in UniCredit and could buy more shares in the bank if this was in its own interest.

He said it would not make sense to sell down its Italian portfolio now, given current market conditions. "Clearly the value of the shares has declined substantially. There is no incentive for us to sell the shares now or in the foreseeable future."

Asked whether the fund would buy Italian government bonds battered by the euro zone debt crisis, he said: "We hold a lot of assets denominated in euros, and we already have enough bonds."

Source: Reuters 

German RWE delays Libya oil start up

The oil arm of Germany's power giant RWE said on Wednesday it would postpone a start up of its large oil fields in Libya, still awaiting an agreement with local authorities on the structure of the venture.

"We are now at the place where we need to build up a joint venture with NOC, all the formalities are in place we are now waiting for NOC to go into registration with us," Christoph Schlichter, senior vice president for North Africa at RWE Dea said on the sidelines of a conference in London.

RWE had initially hoped to start production in 2014-2015 but that date is no longer realistic, said Schlichter.

"They (Libyans) are keen to get new investments on the rise quickly to provide more jobs. But their focus has been ramping up (existing) production," he said referring to a full shut down of Libyan production last year due to a civil war.

The company undertook an exploration campaign in Libya between 2003 and 2010 and made eight discoveries at blocks NC 193 and NC 195. The fields were declared to be commercially viable just prior to the start of the 2011 Libyan conflict, so development plans with NOC could not be finalised.

The discoveries are in the order of 100 million barrels but it is too early to estimate a production rate, added Schlichter.

RWE is the top power producer in Germany and it has been expanding abroad to focus predominantly on Norway, the UK, Egypt, Libya and Algeria, as well as on Denmark and Poland and the Caspian region.

In Algeria, state-owned Sonatrach gave final approval in February this year for a $3 billion development of the North Reggane gas field project.

RWE has a 19.5 percent stake in the project led by Spanish oil and gas company Repsol with Algeria's Sonatrach and Italian utilities company Edison.

The start of production further depends on the timely construction of the GR5 pipeline, which has been delayed several times. The pipeline will connect South West gas fields with Algeria's largest gas field and gas hub, Hassi R' Mel.

"We started field development of Reggane North, together with Sonatrach, Edison and Repsol," said Schlichter, "From what we hear, the (GR5) pipeline should be ready by end 2015. And we will start after, in 2016."

Production is expected to stabilise at 8 million cubic metres a day for the first 12 years Reggane is in operation. 

Source: Reuters 

Libyan Oil Minister Wants Oil Price above $100

Libya's oil minister Abdurahman Benyezza would like to see oil prices above $100 a barrel, he said Thursday at a scheduled meeting of the Organization of the Petroleum Exporting Countries in Vienna.

"I think that price would be good for global economy" [although] the "main point is to stabilize the price," he said.

When asked whether it's appropriate to lift the production ceiling, Mr. Benyezza said "we will have to discuss that after this", stressing that it's more appropriate to discuss quotas at end of year, depending on the "supply and the prices."

He also said the global oil market is currently over supplied by "maybe 1.8 million or 2 million" barrels a day.

Arabtec eyeing Libya, Qatar projects

 

Arabtec Holding, the UAE's biggest builder by market value, is actively looking at oil and gas projects in Libya and hopes to win contracts in Qatar as the country prepares to host the soccer World Cup in 2022, the company's chief financial officer said on Thursday.

'Libya is a medium-term market for us on the residential side, but immediate for oil and gas. Our subsidiary Target Engineering is already looking at some projects in the sector,' Ziad Makhzoumi told Reuters on Thursday.

'Libya needs to rehabilitate its oil and gas facilities to start production again. We're looking at contracts in selected areas,' he stated.

Arabtec's entry into the North African market comes as foreign companies are gradually returning to Libya despite concerns over security and the possibility that the new authorities will review contracts signed during the rule of ousted leader Muammar Gaddafi.

Oil major BP announced last week that it would be resuming exploration work on its concessions in Libya, home to Africa's largest proven oil reserves. Algerian state energy firm Sonatrach also said it will resume exploratory drilling in the country.

Arabtec is also setting logistics and joint ventures in place in preparation to bid for Qatar's planned $100 billion infrastructure projects ahead of the 2022 World Cup, Makhzoumi said.

'We have two major projects in Qatar and we're bidding for some more,' he said. 'We're ready to bid for almost every possible sector,' he added

Goldman Sachs estimates that Qatar will spend about $65 billion to build stadiums, roads, bridges, apartments and hotels in time for the World Cup.

Arabtec is 20.8 per cent owned by Abu Dhabi fund Aabar Investments, which owns stakes in high-profile names such as German carmaker Daimler and commodities trader Glencore and has increased its Arabtec stake from 5.3 per cent since March.

Aabar's increased stake will have a positive impact on Arabtec's operations and will translate into more contracts, Makhzoumi said: 'It is in their interest, as Aabar, that we grow in the business. I can only see positive results out of that (stake increase).'

Arabtec, which more than tripled its first-quarter net profits to Dh84.1 million ($22.90 million), expects to sign the $3 billion Abu Dhabi airport expansion project contract this month, the chief financial officer said.

'It's all done, all agreed and just a matter of finalising paperwork,' Makhzoumi told Reuters.

Last month the Abu Dhabi government identified an Arabtec consortium, including Turkey's TAV Insaat and Athens-based Consolidated Contractors Company, as the preferred bidder.

'Our share is about one third of the contract, which will push our backlog to around 17 billion dirhams from the current Dh14 billion,' Makhzoumi said.-Reuters

Source: tradearabia.com

Libyan official urges US investment to create jobs for rebels

A top Libyan official urged U.S. companies on Monday to help create jobs for former rebel fighters who still have not laid down their guns, by making investments that could transform the country into a peaceful tourist destination.

"These young people, they need challenges. They need jobs. As long they have no jobs, they're going to have Kalashnikovs and they're going to be in the streets, probably creating check points," Libyan Deputy Prime Minister Mustafa Abushagur told the National U.S.-Arab Chamber of Commerce (NUSACC) in Washington.

In a fresh challenge on Monday to the interim Libyan government's authority, members of a Libyan militia known as the al-Awfea Brigade occupied Tripoli's international airport to demand the release of their leader, who they said was being held by Tripoli's security forces.

The militia action forced the cancellation of several international flights just as a NUSACC-led trade mission was due to arrive in the country for meetings beginning on Thursday in Tripoli, Benghazi and Misrata.

While Abushagur did not directly address the situation at Tripoli airport, he sought to reassure the Washington-based business group that Libya was making progress on the many security challenges it faces following last year's war that toppled Muammar Gaddafi after 42 years.

He also told the business representatives Libya was "ahead of schedule" in restoring oil production and had already reached 90 percent of pre-revolution levels.

Abushagur said Libya had massive investment needs in sectors such as infrastructure, telecommunications and health after four decades of neglect and the recent war.

"Our economy is based on one thing: pumping oil from the ground. We need to change that," he said adding that the aim was that in 10 years time, oil should account for only 30 to 40 percent of the economy, instead of roughly 70 percent now.

Abushagur said he saw lots of opportunity for Libya in areas such as tourism, mining and knowledge-based industries.

NUSACC is also targeting these sectors for its upcoming trade mission, along with agribusiness; architecture and design; automotive services and equipment; construction and engineering; defense and security; oil and gas and water and wastewater.

Another major challenge facing Libya is securing its borders from its poorer neighbors, Abushagur said.

He said most economic refugees from Africa who passed through Libya were seeking to reach Europe and many died during the dangerous sea crossing.

Meanwhile, many wealthy Libyans who fled the country during the civil war had yet to return, he said.

Abushagur said that Libya, as a new nation, was "very committed to human rights" and any citizen who had fled and was accused of a crime would get a fair trial if they returned.

At the same time, he said, when it came to those who "have stolen Libyan money, we are going to go after them because we believe that every dollar that belongs to Libya has to come back."

Source: Reuters

www.soclibya.com

Turkey, Libya sign cooperation accord

Turkey’s Minister of Science, Industry and Technology Nihat Ergün speaks during the second Turkish-Arab Industry Cooperation Conference in Benghazi. REUTERS photo

Turkey and Libya have signed a memorandum of understanding for cooperation in industry and technology. 

The memorandum was written during a visit by Turkish Science, Industry and Technology Minister Nihat Ergün to Libya on the sidelines of the second Turkish-Arab Industry Cooperation Conference held in Benghazi.

Ergün said the agreement would allow for the preparation of a strategy document and an action plan to create financial support devices for small- and medium-scale enterprises as well as setting up industrial zones and technology parks.

Ergün said Turkey was ready to share its experiences in industrialization with Libya, adding that an environment should be created where both countries would win.

Libyan Industry Minister Mahmoud Ahmad al-Fitisi said a new Libya was being established and they would like to receive technical assistance from Turkey, particularly in industry.

Meanwhile the economy minister said nine Turkish firms were taken off the list of institutions that Libya took hold of the assets of. The Libyan National Transitional Council had introduced a law and seized the assets of many firms active in Libya including Turkish firms, he said.

Other nations still on list

“We find it meaningful that other firms that Turkish firms do business with have been taken off the list,” he said.

Libya had taken a cautionary judgment on the assets of 338 institutions and individuals owing to suspicions that these entities had links with the Gadhafi regime.

Noting that Libya is a very significant market for the Turkish contracting sector, he said Turkish contractors had constructed many buildings which were ruined during the revolution free of charge. 

“We have talked [with the Libyan government] about Turkish contracting firms’ returning to Libya. Payments of progress billing are scheduled,” he said. 

Turkey will sign a deal regarding the payments of ongoing construction projects, he said.

The Ministry of Economy is working on all the losses Turkish firms have suffered in Libya, he added.

Source: hurriyetdailynews.com 

Shell halts oil exploration projects in Libya

Royal Dutch Shell on Tuesday said it was halting oil exploration projects in Libya owing to "disappointing" results but said it would continue to study drilling opportunities in the country.

The Anglo-Dutch company's Libyan unit had informed Libya's National Oil Corporation (NOC) about the move and of its decision to also halt drilling for potential gas finds.

"Shell Exploration and Production Libya GmbH has informed the National Oil Corporation that it intends to suspend and abandon drilled wells and stop exploration in Libyan licenses LNGDA and Area 89," a Shell spokesman told AFP.

"Despite an extensive seismic and drilling campaign in these licences, results have been disappointing and further exploration cannot be economically justified."

The spokesman added: "NOC has acknowledged our decision and we have agreed to actively peruse new upstream business opportunities.

"Shell continues to view Libya as an important country in its portfolio and will maintain a representative office to pursue upstream business opportunities with the Libyan NOC."

Foreign energy companies are looking to profit from a more stable Libya, whose daily oil output is meanwhile gradually returning to levels seen before last year's uprising against Kadhafi

Source: AFP

www.soclibya.com 

Libya Investigating Unipec, PetroChina Oil Deals Under Gaddafi

Libya's prosecutor office is probing possible irregularities in crude sales to oil giants China International United Petroleum & Chemical Co. (0386.HK), or Unipec, and PetroChina Co. Ltd. (0857.HK) as part of a broader probe into Gadhafi-era oil deals, a file from Libya's Interpol bureau shows.

A file issued last month, attached to a request of arrest against the late ex-oil chief Shokri Ghanem by Libya's Interpol bureau, alleges he agreed to sell oil without contracts to Sinopec and Petrochina.

The probe could cloud the return of energy-thirsty China to Libya after being cast as a supporter of the former regime.

Ghanem, the ex-head of the National Oil Co., "also delivered quantities of crude oil to several companies such as Unipec and PetroChina before signing an agreement with them," the file seen by Dow Jones said.

Sinopec and PetroChina spokespeople declined to comment.

Though Ghanem has since died in Vienna's Danube river in mysterious circumstances, the probe into his dealings continues, said Abdulhamid Eljadi, an anticorruption activist who has been assisting the investigation.

The rebels who fought former Libyan leader Moammar Gadhafi last year had previously said Chinese companies would be at a disadvantage for opposing the foreign intervention which led to them gaining power. However, Unipec, the trading unit of China's largest refiner Sinopec, has now returned to Libya as one of the country's largest oil buyers.

Sales to the two Chinese companies had previously been singled out for scrutiny by Libyan government officials.

The Libyan Interpol document said the issues surrounding sales to PetroChina and Unipec had been first raised by Najwa el-Beshti, who was head of contracts at NOC's marketing department under Ghanem.

Beshti told Dow Jones Newswires the sales had taken place between June 2008 and 2010.

She said contracts had typically been signed six months to a year after deliveries had started, potentially enabling the companies to pay with a delay.

Libyan oil officials have previously said companies which gained irregular deals under Gadhafi could be disadvantaged or lose deals under the new regime. Mustafa El-Huni, the official responsible for oil at the interim National Transitional Council, said last year it would be up to Libyan courts, not the NOC or the interim government, to establish if a contract is valid. "If [corruption] is proven, the law will judge," El-Huni said at the time.

Source: Dow Jones Newswires

www.soclibya.com 

Libya tries to calm wary investors over review

A man walks past the Azzawiya oil refinery in Zawiyah, 50km west of Tripoli. Reuters

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Libya is seeking to reassure investors concerned about a major review of nearly 10,000 business contracts that were signed by the government of the late Muammar Qaddafi.

A group of 20 people appointed by the National Transitional Council (NTC), the temporary government, is scrutinising the contracts to ensure fairness and hunt for evidence of corruption.

"We respect all agreement[s] and the contracts which have been signed by the old regime," said Mustafa El Huni, the deputy chairman of the NTC.

"Naturally there are some contracts which need to be reviewed, but even for those contracts, it will be in the spirit of mutual cooperation," he added. "We have no intention to nationalise or to do something radical. Even if it's an unfair agreement or unfair contract, we'll sit down with a spirit of cooperation and we'll come to agreement with those entities."

The contracts, which span sectors from hospitality to energy and affects investors all over the world, adds to the uncertainty surrounding Libya's future.

Next month, Libyans - including expats in places such as Dubai - are to select a national assembly that will draft the country's new constitution. The Libyan general prosecutor is also investigating domestic and foreign oil companies' records in connection with possible financial irregularities.

Security remains a concern in Libya, where just this month a demonstrator died during a protest outside the prime minister's office and a candidate for the national assembly was killed.

Until late last year, when the review was first announced, contracts with the government appeared to be one of the few things to remain stable in post-revolution Libya.

The NTC, which was established by the rebels during last year's uprising, has said since last summer that contracts signed with the old regime would remain untouched.

"Corruption is unfortunately still there, and unfortunately some of the wheelers [and] dealers who infested Libya in the old days are marketing themselves in the new Libya," said Aref Ali Nayed, the ambassador of Libya to the UAE.

Those signing deals need to ensure their projects share benefits with the Libyan people, he warned in Dubai recently. "If it does, then this project will have long-term success," said Mr Nayed.

"If it doesn't, watch out," he added. "You may be able to pull off the signing of the contract with this government, or with the transitional government, but in the long run you will lose."

If the Twenty Committee, as the 20-strong Libyan review group is nicknamed, were to check every single contract, the process could take three decades, said Adrian Creed, a partner at Clyde & Co, a law firm.

"Some high-level decisions have to be made about materiality or contract threshold because it won't happen otherwise," Mr Creed said.

"Libya has disappointed the investors' community twice before, so if you throw that in the bin it won't send a very good message to the market."

Some argue a good tactic for Libya may be to follow the example of the UK in its infrastructure spending reviews. There, a centralised system has worked through a team of accountants and consultants who swiftly check over contracts, said Hatim Gheriani, the head of global banking and markets for HSBC in Libya.

"Everyone knows what the terms are and therefore everyone gets a good deal," he said.

Mr El Huni sought to answer questions about the extent of the contract review by saying Libya as a nation would not veer towards extremism.

"It will be a moderate country," said Mr El Huni. "It will not be an extremist country economically, politically or even socially. We are a coherent society."

Source: The National

www.soclibya.com 

Libya currently producing nearly 1.5 mil b/d crude: NTC official

Libya is currently pumping nearly 1.5 million b/d of crude and expects to achieve "normal" pre-war production levels of 1.6 million b/d by mid-2012, Abdulbaset Abadi, a member of the oil committee at the National Transitional Council, said Wednesday.

Speaking at the MEED Libya Focus Day in Dubai, he said Libya was seeking foreign assistance to raise the country's oil production capacity to 2.2 million b/d in 2015 and 3 million b/d in 2020. The country's current production capacity is estimated at about 1.6 million b/d.

International oil companies with production sharing contracts signed with the regime of the late Libyan dictator Qadhafi that are due to expire in 2012 will get contract extensions on account of Libya's 2011 revolution, Abadi said.

Libya plans to announce the structure of new enhanced production sharing agreements to replace the Qadhafi-era contracts in 2015, he said. 

Separately, NTC deputy chairman Mustafa el-Huni said Wednesday at the same event that Libya's 2012 budget assumes crude oil production of 1.5 million b/d and exports of 1.3 million b/d.

The national budget of Libyan Dinar 68 billion ($54.38 billion) for the 2012 calendar year, approved in February, is also based on projected natural gas output of 16 billion cubic meters this year, he told delegates.

The budget includes Dinar 38 million earmarked for development spending, including investment in civil and petroleum sector infrastructure, Huni said.

The NTC projects government revenues from the petroleum sector of about $45 million in 2012. The remainder of the budget will be funded from Libyan assets that were frozen in overseas accounts during the country's 2011 revolution, he said.

Huni reaffirmed Libya's intention to honour all agreements with foreign investors signed by the Qadhafi regime.

"We have no intention to nationalize or do something radical," he said.

"Libya is in essence a moderate country that will look at implementing moderate policies." Elections for a National Congress to replace the NTC are scheduled for June. The 85 members of the NTC have pledged not to run for office in order to minimize the transitional government's influence on the election, Huni said.

Abadi said in his presentation that a number of new oil and gas discoveries in Libya in 2009 and 2010, including 24 reported in 2010, had raised the country's proven and probable reserves to an estimated 45 billion barrels of crude oil and 55 Tcf of gas.

US Geological Survey data put the potential for further Libyan oil discoveries at more than 8 billion barrels, including 4.7 billion barrels of conventional onshore crude, while undiscovered gas potential was put at more than 43 Tcf, Abadi said.

He presented an encouraging picture of the current state of Libya's oil export facilities: while the terminal at the port of Sidra had been destroyed by pro-Qadhafi forces, there were no significant operational problems at Brega, Marsa or Tobruk, and only minor damage at Ras Lanuf.

The Libyan petroleum sector's major immediate requirements were the replacement of numerous 4X4 vehicles destroyed in the recent conflict, telephone and Internet services at oil and gas facilities, security services to protect expatriate workers and workforce housing, Abadi said.

The biggest short-term bottleneck was likely to be communications infrastructure, which would take some time to extend to remote oil and gas facilities, he said.

www.soclibya.com

Source: Platts  by Tamsin Carlisle,  and edited by Jonathan Fox

Azerbaijan Offers to Build Refinery, Filling Stations in Libya

Azerbaijan has proposed building an oil refinery and gasoline filling stations in Libya, the Azeri Foreign Ministry said in an e-mailed statement today.

Azerbaijan could build the refinery on its own or with Libya, Azeri Ambassador Agasalim Shukurov said at a meeting with Abdulrahman Ben Yezza, Libya’s oil and gas minister, according to the statement. State Oil Co. (ATPG) of Azerbaijan, known as Socar, is building a refinery in Turkey’s Izmir region. It also has filling stations in Azerbaijan, Ukraine and Georgia.

By Zulfugar Agayev from Bloomberg