Benghazi aspires to become Libya's business capital

* Eastern city wants to restore status as business centre

* Residents say marginalised for decades under Gaddafi

* Benghazi wants return of oil body to city

By Marie-Louise Gumuchian

BENGHAZI, Libya, Jan 23 (Reuters) - At a construction site on Benghazi's waterfront, engineer Seraj Bushada proudly points to a giant hole in the ground that will make way for a 48-floor office tower that city officials hope will help transform part of this port city into a modern business district.

Unlike the capital Tripoli, Benghazi, Libya's second-biggest city, has few modern high-rise developments.

Construction of the $300 million Three Towers project, which will include two smaller blocks housing luxury apartments and a hotel, was delayed due to the uprising against former dictator Muammar Gaddafi, which began here nearly two years ago.

The project is now due for completion in 2015 and is being promoted in Benghazi's bid to regain its former status as the country's business capital and end what residents see as decades of marginalisation under Gaddafi.

"We have to work together to realise this dream," Bushada said.

Turning that dream into reality will be a challenge. Security is a major concern for foreign investors in the city, highlighted by the attack on the U.S. diplomatic mission in September in which the U.S. ambassador and three other Americans were killed.

Only last week a car bomb killed a Benghazi police officer, the second such attack in as many days and the government is considering imposing a night time curfew on the city.

Many Benghazans, however, are calling for the country's new constitution - due to be drafted in coming months - to give the city powers to manage its own affairs and a share of the eastern region's resources.

While the revolution succeeded in overthrowing Gaddafi, they argue, it has failed to spread wealth more evenly in Libya. Benghazi is the main city in eastern Libya, which provides around 80 percent of the country's oil wealth, yet the city is still dependent on the government in Tripoli for funding.

Some residents and officials are calling for the constitution to officially restore Benghazi as Libya's business capital, a status it held under King Idris until his overthrow by Gaddafi in a coup in 1969. With an estimated population of nearly 1 million, it is roughly half the size of Tripoli.

"Everything was here before, Benghazi is the best place to be the economic capital," said businessman Kais el-Bakshishi of the "Benghazi Economic Capital" campaign, which counts about 700 members including local businessmen, activists and academics.

"The main reasons are its strategic location - a gateway to Africa and Egypt and historically the people of Benghazi are traders. A lot of businessmen in Tripoli are from Benghazi."

STRIKING A BALANCE

Perched on the Mediterranean sea, Benghazi was the first city to revolt against Gaddafi and later became the rebels' main base before Tripoli, some 1,000 kilometres (620 miles) away, fell in August 2011.

City officials' first priority is to push the central government to move state companies such as the National Oil Corporation (NOC) and Libyan Airlines, which were based here under King Idris but later moved to Tripoli, back.

"If we can get these back to Benghazi, we can make it the economic capital," said Abdelhamid Elhadad, head of the industrial and oil committee of the Benghazi local council.

"We are trying to restore Benghazi to what it once was," he said, sitting in the council's new offices - where posters claiming "Together we will build our city" hang next to signs banning weapons.

The NOC was formerly the Libyan General Petroleum Company, which was founded in Benghazi in 1968. After the NOC was established in 1970 it relocated to Tripoli.

"The objection is that it is like before - everything is controlled by Tripoli; this is not why the revolution took place," said Tahani Mohammed Ben Ali, head of the Benghazi workers' union at Libya's biggest oil firm Arabian Gulf Oil Company (Agoco).

"There are infrastructure, health, education needs here."

With the country still volatile, Libya's new rulers - led by Prime Minister Ali Zeidan's cabinet and the general national congress - know they have to strike a careful balance to appease regional rivalries.

That plays in Benghazi's favour and the oil ministry has proposed splitting the NOC into an exploration and production company based in Tripoli and a refining and petrochemicals company in Benghazi. Residents in eastern Libya as well as activists and oil workers vehemently oppose the plan, however, and say the whole company should relocate to Benghazi.

"If someone steals something from you, you want it back," Ben Ali said.

Other plans for enhancing Benghazi as a business hub include improving its infrastructure.

Its port is outdated while the airport, which has just one cramped hall, had been slated for an upgrade when the war began.

"The plan before was for 5 million passengers a year, now we want 15 million passengers a year," Bakshishi said.

South Korean company Nemo Partners is building a temporary passenger terminal at the airport. But progress on expanding the airport has been slow as the central government is reviewing previous foreign investment deals in the country before it approves new ones.

Benghazi officials are also considering building a free trade zone and have proposed public works projects to provide jobs, namely for the former rebel fighters who have yet to lay down their weapons.

"We want to look after the factories around Benghazi, we need to boost manufacturing," Elhadad said. "We have an industrial area of around 1,000 hectares, we want to have a real industry here, we want to build more hotels."

Elhadad wants Benghazi to be twinned with cities like Istanbul or Marseille to promote ties and plans to write to the mayor of New York, seeking to attract U.S. interest.

Industry in the area focuses on cement, and cable and steel pipe factories, as well as oil services, but badly needed foreign investment is only trickling in.

The International Monetary Fund forecast Libya's economy shrank 60 percent in 2011 due to the conflict but expected it to expand by 122 percent in 2012 and 17 percent this year.

TRADE PICKS UP

Benghazi still faces many of the same problems as the rest of Libya. Rubbish is piled up on its streets and beaches; jobs are in short supply; and weapons are everywhere as the government has failed to control rival armed factions since the end of the uprising.

However, it has seen more commercial activity in the past year and dozens of new clothing, food and consumer goods shops have sprung up.

"Things are getting better, lots of new businesses were established after the revolution," an Egyptian worker at a supermarket in the city, said. "And people are spending."

One local businessman said retail business in Benghazi had tripled since before the war, but did not cite a source for the figure: "The former fighters have money so they are spending."

At a conference this week, businessmen and campaigners laid out plans for Benghazi's economic revival, but many acknowledged security remained a priority.

Last week Italy - the former colonial power - suspended activity at its consulate in Benghazi and withdrew staff for security reasons after unidentified gunmen opened fire on its consul's armoured car.

The consul was unhurt but the incident recalled the attack on the U.S. mission, in which American intelligence officials say Islamist militants with ties to al Qaeda affiliates were most likely involved. Last week's hostage crisis in Algeria has added to security concerns in North Africa.

"How can you turn Benghazi into an economic capital when there isn't even any security?" Khaled Al-Nomi, a shop assistant, said. "Things are getting worse here, not better."

Many Western businessmen are adopting a wait and see approach towards Libya, keen to see whether the interim government can get a grip on security. Arab and Turkish businessmen are more prominent.

Local Benghazans stress that the violence is more against security officials than civilians, but the attack on the U.S. mission has been a setback.

"Some companies up until last year visited Benghazi," Tarek Alwan, managing director of London-based consulting firm SOC Libya, said.

"Some were actually progressing towards establishing local agents, but since the security is not fully stable in the city, I think many pulled out." (Additional reporting by Ghaith Shennib; Editing by Andrew Torchia and Susan Fenton)

In lawless eastern Libya, U.S. mission just latest victim

By Hadeel Al Shalchi and Marie-Louise GumuchianReuters
International treaties are clear. The Libyan government had a duty to protect the U.S. consulate in Benghazi and it failed utterly when the compound was overrun and four Americans, including the ambassador, were killed.

Libya's problem though, runs far deeper than just diplomatic protection: interim governments have barely governed, and the latest prime minister - named hours after the U.S. mission was torched - has no effective army or police force at his command.

A year after the overthrow of Muammar Gaddafi, the legacy of four decades of one-man rule - when many formal institutions of statehood withered - and of the popular uprising that killed him, is that an anarchic swarm of militias provides both what passes for official security and poses the main threat to it.

For a year, Libyan leaders, backed by the Western allies, have been gambling they can forge a political consensus which will seize power back from the heavily-armed revolutionaries in the streets before rivalries spin irretrievably out of control.

That time may be running out seems most evident in Benghazi. The consulate attack was only the bloodiest and most recent violence in Libya's second city; the seat of last year's February 17 revolution, it has a history of militant Islam, previously directed against Gaddafi, and deep grievances over western Libya's control of oil pumped out of the east.

As one member of the General National Congress, the interim parliament, put it - so bluntly that he did not wish to say it publicly - the state can probably do no more than contain the mayhem for now, still hoping it can build up its own strength:

"As the saying goes, 'If you can't solve the problem, manage it'," he said. "We need to manage it."

Prime Minister Mustafa Abu Shagour, elected by the Congress on Wednesday, said establishing the power of the state was still a priority: "We are going to work very vigorously to build our police force, our army," he told Reuters in an interview.

"We have to deal with these militias because some of them have nothing to do with the revolution, and are made up by a bunch of criminals. We have to dismantle them."

However, the failure of successive efforts since last autumn to persuade the ex-rebel militias to disband and disarm, or to transfer loyalties clearly to the interim leadership, itself a fractious body, has left many skeptical of future prospects.

"There is no shortage of weaponry in Libya, but there is an enormous deficit of state capacity," said Geoff Porter, an independent U.S. analyst of North African affairs.

"The gamble for the Libyans was that they would get their political house in order before the security environment became too difficult to contain. The government has lost that bet."

WILD EAST

In Benghazi, the local protection for the U.S. consulate in Libya's oil capital, fulfilling Libya's obligations under the Vienna Conventions on diplomatic missions, was provided by an outfit known as the February 17 Brigade, a collection of young men with rifles proud of their exploits last year in chasing Gaddafi's army west across the desert, aided by NATO bombers.

A second layer of official public order in Benghazi comes courtesy of Libya's Shield, another paramilitary unit born in the revolution and drafted in, ad hoc, by the new leadership.

But as events on Tuesday evening showed, the pro-government forces have far from secured the monopoly on violence which is a key definition of statehood. Others also helped themselves to the weapons left by Gaddafi's disintegrating army and seem prepared to use them against Western and Libyan targets.

When a furious demonstration, emulating a similar embassy protest in neighboring Egypt over an American-made film insulting to the Prophet Mohammad, turned into an assault with machineguns and grenades on the Benghazi consulate, the couple of dozen Libyan guards offered little resistance, Libyan officials in the city said. Outgunned, some guards may also have decided on their own that wrecking the embassy was justified - several Libyan commanders said Washington deserved to suffer.

Among those identified by local people in the crowd were members of a hardline Islamist group, Ansar al-Sharia. Part of a wider Salafist movement that favors a fundamentalist religious state and appears to have some past contact with and sympathies for al Qaeda, Ansar al-Sharia has been accused of involvement in several violent incidents in Benghazi in recent months.

Since Gaddafi fell, there have been fears that some of his weaponry, and enemies, will end up in a wider anti-Western militant movement across north Africa. But such militants are not alone in providing a platform for popular anger in the east against Tripoli's politicians and their allies abroad.

Life and business in Benghazi has been disrupted by sporadic violence and demonstrations, often accompanied by demands for greater autonomy or investment in the east, separated from Tripoli by historic tradition and 1,000 km of desert highway.

"The people who demonstrated in front of the embassy were seriously depressed about their daily lives in Benghazi and not just angry over the film," said Nasser Ahdash, a political analyst living in the city. "The film added to it. But people feel depressed. People need jobs, hope and a feeling like they're not forgotten by the central government.

"If you start with one hardliner, you will get three in Benghazi when they have this depression from seeing that all the economy, the embassies, are in Tripoli, companies are in Tripoli, all the contracts are in Tripoli," he added, arguing that the new government should improve an economic balance which Gaddafi had tilted heavily away from the east of the country.

Saleh Gaouda, a member for Benghazi of the two-month-old Libyan Congress, also blamed the interim authorities for a failure to impose order in the east and to delegate power to local leaders: "The security breaches we are seeing in Benghazi are a direct failure of the government," he said.

"There is no one on the ground in Benghazi who can make the right decision at the right time ... There is no one who can take control of the situation and actually take responsibility."

The immediate impact of the violence is a clear heightening of caution on the part of foreign diplomats and business people, who had already been taking great care in Benghazi following attacks that included a grenade ambush which blasted the convoy of the British ambassador in June. Libyan officials assured diplomats that the security brigades would protect them.

But the killings at the consulate have set back Benghazi's hopes of investment and international favor: "Certainly you will have people questioning whether to go there," one diplomat said. "The overall feeling is one of caution right now."

Tarek Alwan, whose consultancy SOC Libya advises foreign firms on doing business in the country, said: "The impact is great and will lead to more restrictions on travel, higher travel insurance, on development.

"Libya in general and Benghazi specifically will suffer -because we should never bite the hand that helped us."

Security Fears Cloud Libyan Oil Growth

By BENOÎT FAUCON, WSJ

Heightened security fears after the killing of the U.S. envoy to Libya will further slow the return of foreign oil workers to the country, potentially threatening Libya's plans to boost oil output and grow its economy, according to oil company executives and consultants.

"It's a serious blow to Libya in terms of security," said Tarek Alwan, head of consultancy SOC Libya, which advises international companies investing in the North African nation. "It will delay the return of international oil companies and expatriates."

Oil companies were beefing up their security precautions on Wednesday in the aftermath of the killing of Ambassador Christopher Stevens and three other American diplomats by suspected religious extremists in the eastern city of Benghazi. One European oil company told visiting foreign staff to stay at their Tripoli hotels as a precautionary measure, according to a Libyan oil professional.

Following the ousting of Moammar Gadhafi last year, Libya has surprised analysts by bringing its oil production close to pre-revolution levels much faster than analysts had expected.

Foreign oil companies with production interests in Libya—such as Germany's Wintershall AG, Eni SpA ENI.MI -0.33% of Italy and Total SA FP.FR -0.35% of France—have sent back expatriate workers.

But even before the U.S. envoy's killing Tuesday, attacks on Western interests in June and political protests this summer had already caused some oil-service companies and those with exploration concessions to revise their staffing plans for Libya.

That threatened the country's plans to boost output to 2.2 million barrels a day over the next three years, up 40% from present levels. Such an increase would be enough to overtake Angola to become the eighth largest producer in the Organization of the Petroleum Exporting Countries.

Back in July, Libyan production dropped by 200,000 barrels a day for a short period when protests over parliamentary elections disrupted operations at the country's largest terminal in el-Sider, in eastern Libya.

When it resumed its operations in May, BP BP.LN -0.45% PLC, which has by far the largest exploration plans in Libya, involving investment of $900 million, said the move would pave the way for a return of its expatriates. But three months on, a spokesman for the British company said it had yet to send its foreign staff back because the situation isn't considered safe enough.

Mr. Alwan said he knew of one international consultancy active in the oil sector had that pulled out completely from Benghazi, the capital of Libya's eastern region where the majority of the country's oil is produced, after a British diplomatic convoy was attacked in June.

When foreign staff return, Libyan oil managers say they are sometimes guarded by armored convoys when traveling to and from the airport. Restaurants where they plan to dine are checked first by security guards.

Once Libya accelerates plans to boost production, the reluctance of foreign oil workers to return could leave the country short of specialists in gas-injection equipment—needed to boost production from existing fields—and geologists and seismic workers needed for exploration of new fields, according to a Libyan oil manager at a large European oil operation.

Still, some Libyan officials are hopeful that the formation of a new government—expected to take place soon following elections in July—will lead to serious measures to improve security.

The tragedy "will be an incentive to be more dedicated about security," said Ahmed Shawki, head of marketing at the state-owned National Oil Co. "Other [oil-producing] countries had a worse situation," he added. "Look at Iraq."

The Killing of US Ambassador in Benghazi

We as many people from all faiths around the world received with great sadness the news of the attacks on the American consulate in Benghazi which resulted in the killing of the Ambassador Chris Stevens and three others.

We strongly condemn such attacks on foreign properties in whole Libya and send our sincere condolences to the families of the victims and the American people. Such actions only represent those who committed them, not the real Libyan people.

The US like many other countries played a vital role in helping us toppling former dictator and his regime.

Here is a picture of him taken a few week ago, sitting on the floor and eating a Libyan dish called Bazen

Meet Mahmoud Jibril: The Man Who May Be Libya’s First Elected Leader

Following landmark elections this past weekend in Libya, results point to a coalition of moderates and secularists winning the majority of votes. The head of that camp is Mahmoud Jibril, a man once at the heart of the Gaddafi regime who defected to the rebellion last year

JAMES LAWLER DUGGAN / MCT / ZUMA PRESS

Mahmoud Jibril, who heads the centrist National Forces Alliance, holds a press conference in Tripoli, the Libyan capital, on July 8, 2012, one day after the Saturday elections

Back in 2010, TIME paid a visit to Mahmoud Jibril, a U.S.-educated policy wonk in Libya’s capital Tripoli who’d been drafted by Muammar Gaddafi’s government to overhaul the country’s state-run economy after decades of one-man rule. Sitting in his large office in the National Economic Development Board, Jibril laid out a vision for a Western-style government that would transform Libya from a stifling dictatorship into a thriving 21st century country. “There must be a legal frame with division of powers, and the right of free expression,” he told TIME then. “We are very late. We have to shorten the time span of things.”

As it happened, it took a bloody revolution and thousands of deaths, including Gaddafi’s, to shorten the time span for Jibril’s plan — something that seemed unimaginable in 2010. Now, Jibril might finally get his chance to put his vision into practice, thanks to last Saturday’s elections in Libya. Although it could take days for officials to confirm the election results, Jibril’s centrist National Forces Alliance appears certain to have won the vote for a 200-member General National Congress, and while Jibril hasn’t said he intends to be the new leader, the coalition’s victory puts him in place to head Libya’s first elected government in 60 years — and the first to emerge from the Arab Spring that is not dominated by a religious Islamic party.

(PHOTOS: Libyans Turn Out for a Landmark Election)

For the 60-year-old economist with a Ph.D. in political science from the University of Pittsburgh, that is a most surprising career trajectory indeed. Having left to study in the U.S. in 1975, Jibril later consulted several Arab governments in economic management and had little thought of returning to Libya. Then in 2007, he was lured home by the one man who appeared capable enough of pushing through drastic reforms — Gaddafi’s hugely powerful son Saif al-Islam. In his new job, Jibril told the U.S. ambassador to Libya, Gene Cretz, that Libya was “opening widely and very fast,” according to a diplomatic cable written by Cretz in 2009, published by WikiLeaks. In a markedly optimistic report, Cretz said Jibril had convinced him that there were lucrative business opportunities for American companies in Libya. “Jibril is a serious interlocutor who ‘gets’ the U.S. perspective,” he wrote.

Jibril believed that change was possible within the Gaddafi regime, something that has haunted him since. Many Libyans still question Jibril’s role as an insider in the dictatorship, as well as the fact that he hails from Libya’s most populous tribe, al-Warfalla, who claimed long allegiance to Gaddafi rule.

But by early 2011, Jibril had concluded that Saif’s ideas of reform — real or not — were doomed, so long as his father and the conservative henchmen surrounding him remained in power. Jibril slipped out of Tripoli in Feb. 2011 and joined the revolution in Benghazi, where he had been raised. Then, he quickly began pushing world leaders to back the rebels. Equally at home in Western capitals (as Cretz had suggested), Jibril clinched formal recognition for the rebels from President Nicolas Sarkozy in a crucial meeting at the Élysée Palace in March 2011, which presaged NATO’s bombing campaign weeks later. In Tripoli, Saif fumed to TIME that his closest associates — chief among them was Jibril — had betrayed him “big time.” But by then, Jibril’s diplomatic footwork had succeeded, and it was the Gaddafi regime, rather than Saif’s reform plan, that was doomed.

Jibril went on to head the rebel leaders’ National Transitional Council, but many of his colleagues criticized him for failing to delegate responsibilities properly. He quit the job after Gaddafi was killed last October, and began plotting his political future — one rooted in part on his huge success in turning last year’s rebellion into a full-scale revolution. “He was instrumental in getting international approval for the rebels, and everyone gives him credit for that,” says Sami Zaptia, managing editor of the Libya Herald, a new English-language online newspaper. Zaptia believes that Jibril’s tribal background makes him ideally suited to drawing Gaddafi’s old loyalists — including many Warfalla — into supporting the new Libya. “I don’t think you will find many people who will dispute Jibril’s skills as a planner, a strategist and a visionary.”

Even with those skills, Jibril’s new job, either as the leader or as a key strategist, will be no cakewalk. With massive oil reserves and only about 6.3 million people, Libya has the cash with which to implement economic reforms — a far different situation from, say, Egypt, which depends heavily on U.S. aid. Yet countless weapons remain in the hands of potentially hostile militia groups. And youth unemployment remains rampant, according to the African Development Bank.

Jibril will begin with one big advantage, however: a ready-made plan for the future, which he drafted as head of Libya’s Economic Development Board, using consultants from Monitor Group in Cambridge, Mass.; Ernst & Young; and the Oxford Group. At the time those groups were heavily criticized by some Libya watchers for believing that it was possible to reform Libya under Gaddafi — a criticism that proved correct. In an interview on the night Gaddafi was killed last October, Jibril told TIME in Tripoli that Gaddafi’s regime had blocked his reform proposals at every turn. “They took everything they received from us and just threw it in the garbage,” he said. He listed among other plans massive tourism development, solar-power and wind-energy projects along Libya’s long Mediterranean coastline, a drastic overhaul of the outdated education system and a program to mobilize millions of underemployed women. “This is a real road map,” he said. “We have the plan ready.” Now it’s time to dust it off.

Source: World Time 

Read more: http://world.time.com/2012/07/11/meet-mahmoud-jibril-the-man-who-may-be-libyas-first-elected-leader/#ixzz20JenJoEa

Betting On Libya's Future

The demise of Gaddifi has unleashed a treasure trove of opportunity, but one that’s fraught with risk.

By Robert Bailey

The demise of the Libyan dictatorship has thawed long frozen relations with the Gulf that could lead to wide-scale investment in a country whose political idiosyncrasies for decades denied it viable links to the region and the global economy.

An estimated $200 billion of investment opportunities will emerge over the next ten years according to the French Business Council, which recently took a large group of company representatives to Libya. They and others from countries that supported the overthrow of the regime are anxious to capitalise on the goodwill that has been generated.

In Dubai, a Libya Strategic Investment Forum was organised by the Chamber of Commerce recently, it also supported a Libya Infrastructure and Rebuild conference in the emirate.

The big question is whether the timing is ripe for these initiatives. Even though the National Transitional Council (NTC) is proposing a $54 billion budget in addition to an un-quantified emergency budget for 2012 it has little or no ability to enter into long-term contracts simply because it is an interim government.

Nevertheless observers believe that with its significant energy resources that have still to be exploited, and a potential to become an important aviation and logistics hub between Africa, the Middle East and Europe, Libya has the potential to rapidly expand its economic base.

However, there is a growing sense of unease at the slow progress in establishing any firm central authority. Recently there have been calls for eastern Libya to break away from Tripoli and there is concern is that Libya may face years of instability.

Until a functioning national army and police force is formed the existence of armed, tribally and community-based militias represent a threat to stability.

Members of the militia in Zintan, southwest of Tripoli, for example, still hold Saif al-Islam Qaddafi prisoner in spite of demands that he is handed over to the council in Tripoli.

In spite of uncertainties, work towards agreeing a constitution in mid-2012 goes on though the head of the NTC, Mustafa Abdel Jalil has stated that “if there is no security, there will be no law, no development and no elections.”

Even after such elections it may take some time before a new administration is bedded in and confident enough to award significant contracts.” The interim government in principle is unwilling to take decisions with long-term consequences, and lacks the resources to do so which is frustrating for the conduct of business,” says Oliver Miles a former British ambassador to Libya and now a director of MEC International.

SIGNS OF RECOVERY

But negatives can be overstated.

Physically the country is returning to normality. Telephone links have been reconnected between east and west and, at least, in Tripoli electricity supplies as well as water and sewerage networks are functioning.

Qatar Airways resumed flights to the Libyan capital in February. The airline had been among the first to re-open flights to Benghazi in the east. Alitalia has also restarted services to Tripoli.

Royal Jordanian is flying to Tripoli and Benghazi again as well as to Misrata. The latter has a large medical traffic carrying patients for treatment to Amman.

Emirates began flights to Tripoli again at the end of March. KLM/Air France and British Airways also resumed service. Meanwhile Turkish Airlines has launched scheduled freighter flights to Libya’s Mitiga airport, east of the capital.

Air Malta and Egyptair resumed flights to Tripoli last November and Lufthansa in February. Antonio Tassone, the German airline’s general manager in Tripoli, commented that “the resumption of our flights is a strong and important signal to Libya and the western business community that we are confident to be back.”

Progress on unfreezing assets combined with the unexpected speed with which oil production has returned to nearly three quarters the pre-revolution level, mean that the government is able more or less to pay its way are other positive indicators.

Having plunged below 100,000 barrels-a-day at the peak of fighting upstream production of crude is reported to be around 1.4 million b/d. Pre-war levels of 1.7 million b/d will be reached by the middle of 2012 predicts Christophe de Margerie CEO of France’s Total.

International oil companies with existing contracts are beginning to return. The National Oil Corporation has said that seismic surveys have resumed at concessions run by Arabian Gulf Oil Company while fresh exploration is due to begin in the Sirte basin. Italy’s Eni has resumed offshore exploration 100 kilometres offshore Tripoli.

The Libyan stock market reopened in March albeit in more modest premises on the outskirts of Tripoli. The market though had just five stocks with another eight still to provide up to date financial information.

General manager Ahmed Karoud says that five initial public offerings may come to the market this year including oil and construction companies. There are also plans to list the country’s two mobile operators.

However, optimism needs a reality check. Few are likely to commit to long- term large scale investments where there is chronic political instability particularly if property rights are difficult to enforce and where commercial infrastructure lags far behind others in the region.

GCC'S ROLE

It has been suggested that GCC investors may be more culturally adept working within the currently constrained business environment than Western companies. Whether this is true or not time will tell but there is certainly growing Gulf interest in Libya.

Arriving on Etihad’s inaugural flight to Tripoli in January and accompanied by a 100-strong business delegation, Anwar Gargash, UAE Minister of State for Foreign Affairs declared that “right now our target is to play an important part in Libya’s rebuilding and create viable long- term partnerships.”

The Gulf states, Qatar in particular, played a prominent role in the campaign to oust Gaddafi providing combat aircraft for the NATO air mission as well as material and logistical support to the rebels.

Doha’s help extended beyond military and diplomatic support by marketing a million barrels of oil for the NTC at a crucial phase allowing the rebels to pay salaries in Benghazi.

In addition, Qatar helped launch Libya al-Ahrar in Doha to transmit television programmes and news. The UAE’s telecoms company Etisalat helped restore mobile communications services providing a satellite feed for the rebels after Tripoli cut of cellular links.

In spite of the goodwill generated by such support, Gulf as well as Western interests will be nervous about the Finance Ministry’s review of all contracts signed under the previous regime.

How far this will focus on firms from countries that failed to support the rebels internationally and go easy on those states that provided diplomatic and material military support remains to be seen.

Before the uprising Qatari Diar Real Estate Investment Company had lined up $10 billion of investments with the Libyan Economic and Social Development Fund for a hotel and real estate developments near Tripoli

Dubai-based Al-Ghurair Group, hopes to restart output within months on a joint venture in Libya’s largest refinery at Ras Lanuf and to almost double the present 220,000 b/d capacity over four years.

The group is also assessing openings in other sectors including contracting, civil and mechanical engineering as well as food production. According to Mashreqbank CEO Abdul Aziz Al Ghurair, UAE investment could increase from $2 billion to $5 billion within five years.

In 2009, Abu Dhabi-based Oasis International Power was set to take over a planned power plant at Tripoli West to be built as Libya’s first independent power plant.

An engineering, procurement and construction contract valued at $1.4 billion was awarded to South Korea’s Hyundai Engineering & Construction.

Others are looking at new opportunities. Advisers working for Mohammed Alabbar, a Dubai businessman, chairman of real estate firm Emaar and a partner in Africa Middle East Resources (AMER), an emerging commodities supply chain company, have reportedly been assessing the viability of bauxite and other natural resources in Libya.

Abu Dhabi’s Al Maskari Holding is backing a $3 billion project to build an integrated energy hub involving solar and conventional generation to provide electricity for domestic use and export to Europe via southern Italy.

DP World has held exploratory talks with Libya’s interim officials on ideas for management of the country’s ports. Interim transport minister Yousef El Uheshi has said the sector needs billions of dollars of investment for the expansion and modernisation of ports and dredging to allow larger vessels access.

According to DP World’s chairman Sultan Ahmed bin Sulayem “we have always been interested in Libya and we are continuing our discussions with them.”

Conversations are likely to be extended though especially in a country where privatisation issues have yet to be tackled. “If they sort out their issues, you will see a lot of UAE companies coming in here, says Al-Ghurair,” but cautions “if it turns out to be a very slow process, they will go somewhere else.

Source: Gulf Business

Looking for investment opportunities in Libya

After 8-day visit, U.S. leaders predict a reviving nation ‘open for business’

The fall of Moammar Gadhafi has paved the way for the U.S. business community to invest in Libyaas the troubled Middle Eastern nation tries to rebuild itself after a civil war tore the country apart last year.

After a trip last month to the new Libya, the U.S.-Libya Business Association says the country would make a good investment for many American companies. The trade organization, along with some 20 member companies from the U.S., spent eight days there, meeting with government and business officials.

“The message they sent us very loud and clear is that Libya is open for business,” USLBA Executive Director Chuck Dittrich, who led the trip, told reporters Friday, “and we want the Libyans to know the U.S. is interested in doing business over there.”

The U.S.-Libya Business Association made the trip to assess the country’s needs and were told by Libyan officials that the country’s priorities are security, higher education and vocational training, and health care.

Mr. Dittrich said he was impressed with the country’s current level of safety, which will be crucial going forward if U.S. companies plan to invest there.

“Tripoli was much safer than I anticipated,” Mr. Dittrich said. “I did not feel a sense of tension in the air. It was very much a relaxed atmosphere.”

That said, “If you’re an American and you do get mugged, there’s no 911 to call,” he added.

Though Mr. Dittrich acknowledged that its well-organized oil industry is and will remain the life blood of Libya’s economy, he said the American business group also expects opportunities for investment to open up in infrastructure and tourism.

“Tourism is going to be another growing sector,” Mr. Dittrich said. “It’s a beautiful coastline that’s not developed.”

But for now, the U.S. business community is focused on building lasting relationships with Libyans.

“We didn’t go over there to sign contracts or immediately sell products,”Mr. Dittrich said. “We want to develop relationships with them.”

Dennis Thompson, vice president of U.S. business development at RMA Group, who also made the trip, agreed.

“You’ve got to have patience,” he said. “You’re not going to sign a contract the day you hit the ground. Nobody had any reasonable expectation that this post-conflict country was going to sign a contract in the first visit.”

Instead, “It’s a race to build confidence” and trust, he said.

Libya plans to start building its post-Gadhafi government in June, by electing a 200-member constituent assembly that will pick a 60-member panel to write a permanent constitution and submit it to a national referendum.

“The risk is, ‘What’s going to happen in June?’ ” Mr. Thompson said. “And then once the government is elected, what direction are they going to take?”

Source: The Washington Post 

US and Malta to develop partnership to stimulate business in Libya

Finance Minister Tonio Fenech welcomed Lorraine Hariton, US State Department Special Representative for Commercial and Business Affairs, to discuss possible areas of cooperation between Malta and the US with a view to social, political and commercial activity in Libya.

Ms Hariton is responsible for State Department outreach to the business community and commercial advocacy efforts. She works with the business community worldwide to coordinate commercial diplomacy efforts supporting US foreign policy objectives.

She discussed with Mr Fenech the relationship Malta has built with Libya in all sectors, the security situation in Libya as well as the opportunities that exist for possible investment and development. Both governments, the DOI said, hope to build upon this meeting to provide access to the ‘Malta discovery process’ to US firms wishing to do business in the region.

Mr Fenech expressed the hope that this visit would be the foundation stone for a possible long-term partnership at a political and economic level between the US and Malta which may necessitate partnerships between US and Maltese firms on larger projects in Libya.

Source: Malta Independent online 

Libyan oil minister says output about 1.5 mln bpd

Libyan oil production has climbed to about 1.5 million barrels per day (bpd) and the North African country hopes to reach pre-conflict levels by mid-year, Oil Minister Abdulrahman Ben Yazza told a news conference on Monday.

"We have reached 85 percent (of pre-conflict levels)," Ben Yazza told the Oil & Gas Libya 2012 conference. "We hope to reach our target by the middle of this year."

Libya produced 1.6 million bpd before last year's uprising, which led to the ouster and killing of leader Muammar Gaddafi, brought flows to a virtual standstill.

Libya this week hosts its first oil and gas conference since the end of last year's war. (Reporting by Marie-Louise Gumuchian and Ali Shuaib; editing by Jason Neely)

Source: Reuters 

Good News from Libya

A storefront along Tripoli Street in Misrata. Credit: Yuri Kozyrev—NOOR for TIME

Slowly but surely, the revolution in Libya is bringing stability and making progress. Yesterday, 
he Zintan Brigade turned over control of the Tripoli Airport to the Libyan government. Two days ago, 
Libyan Airlines started regular flights to Malta and the Zintan Brigade are now making plans to transfer 
their prize catch, Saif Qaddafi, to the NTC as well.

A four day conference, Infrastructure Libya 2012, backed by the ministries of Planning
and of Communications, and Oil and Gas Libya 2012, hosted by the Oil Ministry at the Tripoli
International Fairground, begins on Monday. Companies from Canada, Egypt, France,
Germany, Italy, Malta, the Netherlands, Tunisia, Turkey, UAE, UK and USA, as well as those from
Libya, are expected to attend. Even the Russians and the Chinese are negotiating their return to
Libya. Libya just bought 50,000 tons of Russian wheat.

Even the bad news has a good side. Last Thursday, when Amnesty International reported on the
death by torture of yet another black man from Tawargha in a Misrata detention center, it was the
headline in the decidedly pro-revolutionary Libyan Herald, indicating that the revolution is willing
to look honestly at itself, warts and all. And while, as I have said before, even one such death is
one too many, the fact that AI found only one such death in the two months since their earlier
report of more than a dozen killed by torture between September and February, indicates that
things are trending in the right direction.

More importantly, the root of these abuses, the make shift prisons setup by various revolutionary
brigades to contain the counter-revolutionaries immediately after the victory, is being dealt
with. On Wednesday, the Justice Ministry announced that it had taken over control of 30 such
detention centers from the thuwar.

So while, armed clashes, continue to cause trouble, there were reports of renewed fighting in
Kufra today after a seven week lull, and the flood of illegal immigrants from sun-Saharan Africa
continue to be a problem without solution, the country is rebuilding. The Sirte Local Council has
collected 1.5 billion LD in claims for damage caused by the heavy fighting there, and even in the
heavily damaged buildings on Tripoli St. in Misrata, which saw some of the heaviest bombardment
of the war, flower and dress shops can be seen to open in the bombed out remains.

As Abigail Hauslohner reported today on the Libyan Tweepforum:

all along Tripoli Street, there is also rebirth, and there is hope. New billboards and storefronts have sprung up from the city’s ashes. Uniformed traffic cops in white gloves patrol intersections—despite the absence of a fully functioning central government. And construction workers in orange vests clear rubble and tend to new flowers in the grassy medians. Stores selling wedding dresses and school supplies have re-opened their ground floor display windows; even as the gaping holes caused by rockets and tank shells remain to be fixed just above. “There are a lot of signs of war but you can see that there is life,” Yuri says. “There is life in different ways, girls on the street, boys on motorbikes, and flower shops.”

By Clay ClaiborneFollow (@Clayclai)

Source: Dailykos