Shell’s undignified exit from Libya

There seems to be a lot going on right now between Shell's Libya employees and the company's senior managers. It all started when the Libyan wrote an angry email to Shell's management in response to the announcement made by the company to exist Libya.

Here is the response from Shell

By John Donovan

We have already published an article containing a leaked email purportedly sent on 14 June 2012 by disgruntled Shell Exploration & Production Libya staff to senior Shell managers. Shell claims that it is withdrawing from Libya because of a deteriorating security situation. It self-evidently prefers to do business with dictators (a policy stretching back to Hitler).

The disgruntled employees – 17 in total, are all members of Shell’s security staff in Libya.

We now have a Statement of Complaint signed by all 17, detailing serious allegations against Salah Alshaafi, the chief of the Shell Security team.

Salah Alshaafi is accused of being an agent of the Libyan security services . They say he has engaged in corruption, including misappropriation of funds meant for the security team and has used intimidation, including threats of imprisonment, to prevent Shell staff from speaking out. The complaint is said to be supported with evidence and witnesses.

Among the information supplied is a VIP Recruitment record apparently prepared when Shell was still buttering up the Gaddafi regime.

CLICK TO ENLARGE IMAGE

We also have an email sent today 16 June 2012 to a wide circulation list of Shell executives/employees concerning HR consequences of Shell’s departure from Libya.

Sent as an update to the previous invite:

Dear all,

In order to conduct our Department presentations on Severance packages safely and comfortably, the meetings will now be held at the Corinthia Hotel on June 24, 2012. Individual discussions to further explain the packages will also be held at the hotel on June 24, 2012. Exact timing of the meetings will be communicated to you later this week.

I hope this will not inconvenience any of you.

Kind regards,

Sana Sharafeddin

HR Manager

Shell Exploration & Production Libya GmbH

KM6.2 Gergaresh Road, Abunawas2

P.O.Box 91791

Tripoli, Libya

Mob:    +218912203940

Email:  Sana.Sharafeddin@shell.com

EMAIL ENDS

MORE INFORMATION IS PROMISED

RIGHT OF REPLY

Salah Alshaafi is invited to supply for publication here, on an unedited basis, any response he wishes to make to the allegations made against him.

COMMENT RECEIVED FROM A SHELL RELATED SOURCE

I note that the company name as stated on the email published today is “Shell Exploration & Production Libya GmbH”

The GmbH (Gesellschaft mit beschränkter Haftung) suffix denotes that this is a German company (registered in Hamburg).

German employment laws are amongst the most inflexible in the world. Perhaps the Libyan staff should take their complaints to a German court – from the recent treatment accorded to the representatives of the International Criminal Court (and numerous other recent events) I’m not sure that the Libyan legal system has sufficient credibility to provide justice to those who need its protection (and especially those whose pockets are less deep than Shell’s).

A couple of quotes fromhttp://www.mygermancity.com/german-employment-law

“German employment law is there to regulate relations between you and your employer. Of course, the law favors the employee and intends to protect him or her from unfair practices. You should know that all German employees must have written contracts with their employer. This is law in Germany. It includes contracts that show salary and benefits, starting date, place of performance and so on.”

“German employment law also regulates the rules of termination. You will be given maximum protection so you won’t be dismissed unfairly. Depending on how long you’ve been employed at the company, the employer will have to give you anywhere from four weeks to seven months notice. Be sure to check your employment contract as it will have been mutually agreed upon within your contract.”


Source: Shell 

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.

Libya To Offer New Production-sharing Contracts

Libya will offer new production-sharing agreements to international oil companies on improved terms to existing contracts, but this won't happen this year, said the country's Minister of Oil and Gas, Abdurahman Benyezza Wednesday.

Libya isn't currently planning to revise the terms of existing contracts with foreign oil companies, but there may be a process to equalize the terms of new and existing contracts in the future, he said.

"At the moment we are working on the [contract] models. We'll have to study and see where we can improve," Mr. Benyezza told reporters at the Organization of Petroleum Exporting Countries International Seminar in Vienna. "Production-sharing agreements will be the main type of contracts of course. New ones will not be [offered] this year."

Whether existing contract holders will also be offered the same terms as newcomers has yet to be decided, he said.

"We are not in a process to change [existing] agreements at this time," he said. But in the future existing terms will be evaluated, "not to create inequality of contracts," he added.

Libya intends to invest $10 billion on raising oil and gas production capacity from existing fields and $20 billion on new exploration in the next decade, Mr. Benyezza said.

Source: Dow Jones Newswires

Libyan Ministry of Health explores collaboration opportunities with Dubai Healthcare City

A high-ranking delegation from the Libyan Ministry of Health visited Dubai Healthcare City (DHCC) to raise awareness about the status of the Libyan healthcare sector and engage in dialogue with healthcare institutions in the UAE.

Headed by the Libyan Deputy Minister of Health, His Excellency Dr Omran Turbi, the delegation comprised Dr Amal Naagi, the Ministry's Head of Medical Exhibitions, Dr Ashraf Shembesh, Director of Medical Services, and Dr Fauzia Tushani, Director of Media Relations. 

During their visit, the visiting officials hosted a seminar on 'Opportunities in the Libyan Healthcare Sector' to highlight the revolution's impact on healthcare services in the country and underline the requirements that were urgently needed for rebuilding the system. 

Dr Ayesha said: "DHCC is pleased to support the Libyan Ministry of Health. The seminar served as a strategic platform to increase cooperation between the Libyan Ministry of Health and the healthcare community in Dubai. It also helped to educate healthcare providers and professionals from the UAE and the Gulf region on the healtcare requirements in Libya."

The DHCC team led by Dr Ayesha Abdullah offered the delegation a tour of the healthcare park and provided a brief outline of the history, vision and achievements of the free zone.

Source: ameinfo.com

www.soclibya.com 

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 

Ahmed Fakroun " My School" Campaign

A new campaign called "My School" to help raise awareness to build and repair schools across Libya

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 

British Petroleum (BP) to resume operations in Libya

A BP logo is seen on a petrol station in London November 2, 2010.

Credit: Reuters/Suzanne Plunkett

By Hamid Ould Ahmed

BP is to resume exploration activities in Libya that it suspended because of last year's uprising, re-starting a relationship which under ousted Libyan leader Muammar Gaddafi landed the firm in the centre of a political storm.

BP's return is a milestone in the recovery of Libya's energy sector, though this was tempered by an announcement from Royal Dutch Shell (RDSa.L) that it would pull out of fields in Libya on the grounds that they were not worth developing.

BP closed down operations in Libya and withdrew its expatriate workers in February last year, days after protests broke out in eastern Libya which with help from NATO warplanes and missiles eventually forced Gaddafi from power.

The oil firm follows other majors, including Eni (ENI.MI) and Total (TOTF.PA) in restarting Libya operations, despite lingering worries about security and the possibility the new authorities will try to re-negotiate contracts signed under Gaddafi.

The head of Libya's National Oil Corporation, Nuri Berruien, and Michael Daly, BP's executive president for exploration, agreed in Tripoli on Tuesday to lift force majeure, the legal mechanism under which BP suspended its operations last year.

The agreement was a "significant milestone in BP's plans to return to the exploration of onshore and offshore blocks," Daly said in a statement.

BP's then chief executive Tony Hayward travelled to Tripoli in 2007 to sign a $900 million contract giving the company the right to explore onshore and offshore fields in Libya, home of Africa's largest proven crude reserves.

But the deal quickly became entwined in a furious political row about Abdel Basset al-Megrahi, the Libyan convicted of the 1988 bombing of a U.S. airliner over the Scottish town of Lockerbie.

Megrahi died in Tripoli earlier this month, three years after Scottish authorities released him on the grounds he was terminally ill and did not have long to live. He had returned to a hero's welcome in Tripoli.

Megrahi's release caused a storm of anger in the United States, where many of the victims of the Lockerbie bombing were from. The U.S. Senate Foreign Relations Committee launched an inquiry into whether there was any connection between Megrahi's release and BP winning the exploration deal in Libya.

The company and the British government have always denied any connection between the two, although BP did say it lobbied for Megrahi's transfer to Libya.

SECURITY SITUATION 'MANAGEABLE'

Libya now is preparing for its first ever democratic elections, but the new government is weak and struggling to keep in check armed volunteer militias.

A BP spokesman said security was going to be "the determining factor on how quickly we move."

"At the moment we feel security and safety is sufficiently manageable."

It was likely to be months before BP had everything in place to re-start its exploration work, the spokesman said.

"The first thing we need to do is re-establish the contracts for drilling and logistics," he said.

"We need to get contractors back in for the onshore and offshore drilling .. Then it's back to work as soon as possible."

Shell said its decision to pull out of its Libyan contracts did not show any lack of faith in the oil sector, and said it would keep an office open in Libya to look into new deals.

In a statement, the company said it would abandon drilled wells and stop exploration on its two Libyan licenses. It said its departure had nothing to do with security issues and was taken on a purely commercial basis.

"Despite an extensive seismic and drilling campaign in these licenses, results have been disappointing and further exploration cannot be economically justified," a Shell spokesman said. "We have agreed to actively pursue new upstream business opportunities."

Asked about Shell's decision, NOC chief Berruien told Reuters by telephone: "All I can say right now is that Shell is not withdrawing from Libya. They are staying."

Source: Reuters

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 

New decree regarding foreign ownership in Libyan companies released

A new decree has been issued by the Libyan Minister of Economy (No (103) 2012) setting out the purposes, conditions and percentages for foreign individuals or companies to set up business in Libya.

The decree is entitled ‘The participation of foreigners in partnership companies and opening of branches and representative offices for foreign companies in Libya’.

The decree allows for both foreign individuals and companies to partner with Libyan individuals and Libyan companies according to their activities registered and based in abroad. But not forming Holding Companies.

The partnership companies can either be:-

 Shareholding (musahama) companies according to degree (No (23) 2010)

Or

Limited (mahduda) companies.

For the shareholding companies, the capital must be a minimum of one million LYD of which 30% (300,000 LYD) must be deposited at a Libyan bank at the stage of establishment.

There are five compulsory requirements such registration documents, licences, evidence of depositing the agreed share etc.

The limited companies can be set by individuals and a minimum capital of 50,000 LYD is required.

There are six compulsory requirements such as proof of identity, he/she has no criminal past, no bankruptcy history, evidence of depositing the agreed share etc.

The main purposes of forming the partnerships are to achieve followings:-

       ·         Transfer and localise the know-how and technology.

       ·         Annual technical and vocational training programmes for Libyans.

       ·         Annual development programmes for local labour to replace non-Libyans.

       ·         The use of equipment, machinery, raw materials and production inputs available in the local market

The maximum shareholding allowed for non-Libyans is 65%, but in exceptional circumstances the Ministry of Economy can raise the limit to a maximum of 80%. Libyan partners will be represented according to their shares.

There are 12 areas of activity where foreign partnerships are prohibited from operating in Libya as follows:

1.      retail and wholesaling

2.      importation

3.      catering

4.      agencies/distributorships

5.      auditing and legal firms

6.      Land transporting

7.      Inspection activities on all good supplied or imported only with the permission from the Ministry.

8.      Marine handling, shipping and air cargo activities.

9.      Packaging activities.

10.   Stones and rockets crashing.

11.   Civil construction for contracts for less than 30 million LYD.

12.   Any other restricted activities only allowed for Libyans

This decree excludes companies which already have legally set up branches in Libya at the time of the passing of this decree and which are contracted to implement projects – until the expiry of their contracts .These companies must thereafter renew their documentation upon expiry.

Companies with no branches or partnership agreements can apply for branch offices for market research etc, without the right to sign contracts. Branch offices can be opened for 2 years and are renewable for another 2 years only once. Branch offices discovered to be transacting commercial activities would be closed.

Article 18 of the decree stipulates that applicants to form Libyan-foreign companies shall receive a reply regarding their application, either way, within 30 working days.

Companies wishing to renew their presence in Libya should do so 3 months before the expiry of their licence.

Finally the decree in its ultimate article No.(21), stipulates that this decree is in force as of its date of publication (13 May 2012), and that Libyan-foreign partnership companies must legalise their status within one year of the passing of this decree.

Please click here to download the decree (Arabic version) http://www.docstoc.com/docs/120962773/D103

NOTE: All documents in forming the partnerships must be translated into Arabic in LIBYA and must be stamped at Libyan embassies or counsels of the country-based individuals or companies.

by Sami Zaptia (Libya Herald) and improved by Tarek Alwan (SOC Libya Ltd).

For more information please get in touch at T: +44 208 9878450 or E: info@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 

A Libyan miracle emerging from the Arab uprising

MEED’s Libya Focus Day highlights the business and project opportunities arising in the post-Gaddafi era

MEED’s remarkable Libya Focus Day in Dubai on 16 May brought together four representatives of the National Transitional Council (NTC), a heterodox group of Libyan business people, and dozens of uncertain foreigners wondering whether reconstruction in a country wrecked by four decades of dictatorial rule will ever come.

The Libyan business opportunity nevertheless has rarely looked more compelling. Oil production is expected to return next month to levels last seen before the start of the uprising that ended Muammar Gaddafi’s regime. Libya can expect to earn at least $45bn from oil exports this year and its economy should return to its 2010 position. Gaddafi’s austere rejection of credit means the new regime’s got obligations, but practically no debts.

The loss of life and property during the uprising was severe and many suffered permanent injuries. But the damage done to the infrastructure was essentially superficial. As Libyans living in Libya never tire of saying, Libya in 2012 isn’t like Iraq in 2003.

Internal divisions will take longer to repair. Practically no Libyan with professional, management or business skills can escape the charge that they at least silently accepted the previous regime’s excesses. But a divide has nevertheless emerged between those that kept their heads down until Gaddafi was dead and the minority that rebelled before.

It expressed itself during the Libyan Focus Day and was voiced by Libya’s ambassador to the UAE, Aref Nayed, who warned foreign companies to steer clear of business people with links to the previous regime that were hawking themselves as middle-men now. Nayed was talking about members of the audience he was addressing.

And yet, there was little rancour in the room. Everyone lost materially, morally or spiritually under Gaddafi. All Libyans, including his closest family members, were victims.

Suleiman Al-Fortia, NTC housing and utilities committee head, said a government capital budget of about $30bn had been approved for 2012 and that more large-scale investment was planned in the years to come. This was a huge opportunity for the domestic private sector and foreign companies ready to deal with Libya in a new and better way.

But the legacy of the past is inescapable for the hundreds of western firms that were encouraged by their governments to participate in the Libyan economy in the years following Gaddafi’s renunciation of weapons of mass destruction in 2003.

Aecom’s programme director for housing and infrastructure board projects, Christopher Toomey, said his company signed up for Libya’s housing projects in 2008 and continued working on them until the US government imposed sanctions on the regime in February 2011. With sanctions lifted following the end of the uprising on 23 October 2011, Aecom has been seeking to revive its contract. It says it’s still valid and relevant. Toomey said that revisions could lift its ultimate long-term value to $100bn.

The issue for Aecom and companies in a similar position is to secure the new regime’s blessing for Gaddafi-era contracts. Al-Fortia said that more than 10,000 companies are now being reviewed by a special body empowered by the NTC to terminate those deemed to have been secured through corruption or other unfair practices.

Clyde & Co’s Adrian Creed said that it would be impossible to carry out a review of so many contracts credibly and quickly. One way round the problem is to approve contracts that are already at least 70 per cent complete. Another is for contracts with Libyan businesses, most of them worth $1m or less, to be automatically cleared.

The impact of the review is obvious to recent visitors to Libya who say that idle cranes and incomplete projects are the defining characteristic of many Libyan towns and cities.

The good news is that doing business and setting up a branch or company in Libya is possible and comparatively straightforward. Commercial laws dating as far back to the Libyan monarchy, which lasted from 1951 until 1969, are viable and enforceable, lawyers say.

The most radical views were expressed by Husni Bey, the charismatic chairman of the Husni Bey Group. Bey dismissed the National Transitional Council as redundant in light of elections to a public national conference due in June; repeated his call for the 10,000 contracts to be reactivated immediately or scrapped and called for the role of the Libyan state to be radically reduced.

NTC deputy chairman Mustafa el-Huni, a pragmatist who addressed MEED’s previous Libya conference in Dubai in 2010, was emollient. “Moderation is the main principle we shall follow,” he said. “There are some contracts and agreements that need to be reviewed, but if this will be done within the spirit of mutual co-operation. We have no intention to nationalise or do anything radical, even if they are unfair contracts.”

Not every Libyan in the room agreed. But at least they were prepared to listen. By the standards of other states divided by the dramas of the Arab uprising, that was a Libyan miracle in its own right.

Source: MEED. the article: http://www.meed.com/sectors/economy/government/a-libyan-miracle-emerging-from-the-arab-uprising/3138170.article#ixzz1v8CtFSOk