Top Ten Surprises on Libya’s Election Day

By JUAN COLE

Most Western reporting on Libya is colored by what is in my view a combination of extreme pessimism and sensationalism. It has been suggested that because most reporters don’t stay there for that long, many don’t have a sense of proportion. It is frustrating to have faction-fighting in distant Kufra in the far south color our image of the whole country. Tripoli, a major city of over 2.2 million (think Houston), is not like little distant Kufra, population 60,000 (think Broken Arrow, OK)!

In the run-up to the elections held on Saturday, a lot of the headlines read ‘Libya votes, on the brink’ or had ‘Chaos’ in the title. But actually, as the Libya Herald reports, the election went very, very well (which did not surprise me after my visit to three major cities there in May-June). The NYT post-election headline of ‘Libyans risk violence to vote’ is frankly ridiculous; in most of the country that simply was not true, though it was true in parts of Benghazi. Even then, how many people died in violence in this election? I count two, but in any case it is a small number. In Tripoli, the election was described as a big family wedding, with lots of loud celebration and tears of joy. Here are the top ten surprises of the election for Libya watchers:

1. Turnout was about 60%, with 1.6 million casting their ballots. This high turnout is especially impressive given how confusing the election procedures were, with 3,000 candidates and only 80 seats out of 200 set aside for political parties (most newly formed and not well known).

2. There was relatively little election violence, certainly compared to South Asia, where election day often entails dozens, sometimes hundreds, of deaths. The Libya Herald piece quotes the High Electoral Commission as saying, “…of 1,554 polling centres across the country, 24 were unable to operate, including two in Kufra, six in Sidra and eight in Benghazi.”

3. The remnants of Qaddafi supporters made no trouble, and many went to vote enthusiastically. One of the many wrong predictions made last year by opponents of the revolution was that after it was over, there would be an Iraq-style pro-Qaddafi resistance. It turns out that Qaddafi wasn’t actually popular, and now that he is gone no one is interested in making trouble in his name.

4. One of the last cities to fall to the revolutionaries was Bani Walid, and it was alleged for a long time after the revolution to be in the hands of Qaddafi loyalists. This allegation was always a vast exaggeration. There were only a few militiamen there, who made demonstrations downtown. In fact, if anything, it was the revolutionary militias that controlled a city that somewhat resented them because of their high-handedness. Luke Harding of The Guardian, who bothered actually to go to Bani Walid, found people there as excited about the elections as elsewhere, and eager to combat their city’s reputation as a refuge of former regime loyalists. 46,000 had registered to vote, out of 85,000 inhabitants– i.e. most of those eligible to vote must have registered.

5. The formerly upscale city of Sirte, which had been seen by the revolutionaries as favored by Qaddafi, and near which he made his last stand, decided not to boycott the vote after all, according both to Agence France Press and to the following:

Rena Netjes ‏@RenaNetjes

Corresp alHurraTV in ‪#Sirte‬: “Turnout 70%, women 35-40%. Ppl very very happy to be able to vote for the 1st time” ‪#Lyelect‬.

There are genuine resentments toward Sirte on the part of the revolutionary cities, and locals complain about discrimination of various sorts. They clearly feel that being well represented in the new parliament is a way of gaining a voice and being reintegrated into the new Libya. It was places like Bani Walid and Sirte from which trouble on election day had been expected, and it did not happen.

6. The Muslim fundamentalist parties that were expected to dominate the new parliament may not do so. First of all, only 80 of the 200 seats are allocated to parties, and the liberal party of former head of Qaddafi’s National Economic Development Board, Mahmoud Jibril, is said to be doing well in early returns and exit polls. Because of the large number of independents and uncertainty with whom they will caucus, predictions about the shape of the government are premature. The West is more secular than the east or the south. In Libya, the remnants of the old regime are called ‘seaweed’ or ‘algae’ (tahallub), i.e. the flotsam left behind when the tide recedes. As in Tunisia and Egypt, there has been a lot of debate around what to do with them. They often have a lot of money, and are regrouping to succeed in the new system. Since a lot of prominent Libyan technocrats had been lured back to the country in the past decade, with Qaddafi’s and his son Saif al-Islam’s attempt to open to the West, leaders like Mahmoud Jibril (al-Warfalli) are considered by some to be leftovers, while others see him as someone who went over to the revolution and served as its first transitional prime minister.

7. Despite the faction-fighting that has plagued some desert cities, such as Zintan and Kufra, in southwest Tripolitania and the Fezzan region of Libya, respectively– its third traditional region after Tripolitania and Cyrenaica– went to the polls quietly and peaceably for the most part. Two of the polling stations in feud-ridden Kufra could not open because of tension. Here’s what my Jabal Nafusa and Fezzan twitter feed looked like:

“Women crowds in Zintan for voting …

9:16 AM – 7 Jul 12 via Twitter for iPhone ·

22h Libya.elHurra Libya.elHurra ‏@FreeBenghazi

July7: Election observers at a Zintan polling station. Reports of good turnout from women but no pics yet ‪#Libya‬

20h AC Tripolis AC Tripolis ‏@david_bachmann_

Very big crowd in front of voting room for people from ‪#Ghadames‬ – quite noisy, but relaxed ‪#LyElect‬ ‪#gheryan‬ ‪#Libya‬”

8. A big surprise is that what little election day trouble there was came from the East, from the center of the revolution. Thus, small crowds or small militia contingents attacked or tried to attack polling stations in Ajdabiya, Sidra, Ras Lanouf and Benghazi itself. But aside from a few stations in Sidra and 8 in Benghazi, all of them reopened and some stayed open till midnight to make up for having been closed in the morning. In one incident in Benghazi,pro-election crowds actually drove off a group of states’ rights protesters who want decentralization.

9. Women registered to vote, ran for office, and went to the polling stations in surprisingly high numbers. In some small cities, eyewitnesses thought the women’s lines were much longer than those of the men.

10. Among this generation of Libyans, democracy is really, really popular.

Elections to mark new start for Libya economy

For Tripoli businessman Salem Mohammed, Libya's first elections in a generation on Saturday will pave the way for what he believes the North African country should become - a new Dubai.

"We have oil, we have money, Libya can easily be just like Dubai," the 47 year old, who works in manufacturing, said.

"We just need foreign investors and hopefully they will now start coming and business will boom."

Nine months after the end of Libya's uprising, Mohammed hopes Saturday's election of a national assembly will mark a new start for an economy that stagnated under Muammar Gaddafi's 42-year autocratic rule.

Investors will be closely watching the outcome of the vote - with no indication of a leading contender - to see what it will mean for projects that were frozen during the fighting and for the vast opportunities likely to emerge in an oil-producing nation with the wealth to pay for construction and healthcare.

Libya's new rulers have said no major new concessions would be awarded until after the polls and are reviewing past deals.

Once elected, the new 200-member assembly will appoint a government to replace an interim administration that lacked the mandate to make major decisions, and expectations are for old projects to restart and for new contracts to be signed.

"There are a lot of projects (on standby), everyone wants to settle their projects from before," said Klaus Fodinger, head of the cement division at Austria's Asamer Holding, which resumed operations in Libya in October.

"If there are no institutions, no one to talk to, how do you settle deals from the past? The elections are a crucial event."

Many international businesses came to Libya in recent years, attracted by its huge energy reserves and a population, which although numbering just 6 million, has median incomes much higher than elsewhere in the region.

But the eight-month NATO-backed uprising sent foreigners fleeing.

While oil companies were the first to return and have helped Libya climb back close to pre-war output levels of 1.6 million barrels per day, others have not been as fast.

Government trade delegations from around the world have visited, vying for future contracts. As commercial flights have resumed, businessmen have also jetted in for short stretches. Most companies which had a foot in Libya before have mainly wanted to get their ventures back up and running as they await a clearer political and legal landscape.

Tarek Alwan, managing director of London-based consulting firm SOC Libya, said he had been approached by numerous companies seeking guidance on how to enter the Libyan market.

"Major ones are seriously interested but they have not committed yet because the situation is not fully stable, economically and politically," he said.

"They have been waiting for the elections so this will give them some sort of assurances that there will be proper elected (authority) to represent the country."

WAITING FOR THE GREEN LIGHT

Major construction, such as residential property and hotels, as well as transport projects are untouched since last year, awaiting the green light from the authorities to restart.

"Despite the fact that most major public-sector projects are on hold, there is nonetheless a great deal of planning going on across many ministries and government agencies, and this is a positive sign," said Alex Warren, of research and advisory firm Frontier, which runs The Libya Report business site.

"It suggests that once an elected government is in place, then many projects look set to start or be resumed."

The question is how quickly they will resume. The fasting month of Ramadan, when daily life usually slows, begins shortly after the elections.

The assembly is expected to be named at least two weeks from July 7 after ballot counting is finalised and an appeals process. Within 30 days of its first meeting, it will appoint a new prime minister who will form a government.

"For major projects and contracts, I don't see it really picking up, in terms of new tenders or companies returning, until the last quarter at the earliest," Warren said.

The election is expected to lead to reforms and investors want to know what those policies will be. In May, the economy ministry issued a decree enabling foreign companies to set up joint ventures, branches and representative offices in most sectors, more easily.

"Businesses are looking with great hopes towards the elections," David Bachmann, head of the commercial section at the Austrian embassy in Tripoli, said.

"However, they are aware that probabilities are high that even after the elections it might take some months - hopefully not years - before decisions are taken."

While public sector entities await, the private sector is flourishing, especially trade. Tripoli's port is heaving with activity and foreign produce is stocked on supermarket shelves. A cash crisis has eased and shops and cafes have re-opened.

Monoprix Tunisia, an affiliate of the French supermarket chain, wants to start opening 10 stores in Libya from late 2012, after uprisings in both countries delayed earlier plans.

On the construction side, small-scale private projects have taken off - homes are being built, businesses being refurbished.

HUGE POTENTIAL; SECURITY RISKS

Austria's Asamer, which operates cement factories in Libya through a joint venture, has gradually increased production since January.

"We see a huge potential - there are the needs of young population and a lot of infrastructure to be reconstructed. We expect a boom in construction activity," Fodinger said.

Gaddafi isolated Libya's economy from much foreign competition, reserving licences and contracts for his own circle, so the prospect of a more open market is attractive to new entrants.

Dependent on oil, Libya needs basic infrastructure development as well as investment in property, consumer industries and telecoms after a fifth of transmitter stations were destroyed in the war. It will also need foreign investment and expertise to increase oil and gas production.

Its tourism industry is largely unexplored, despite stretches of beaches and well-preserved Roman ruins.

Various fairs drawing international businesses have allowed companies to cultivate relations. Industry Minister Mahmoud Al-Ftise said there were plans to increase privatisations, and Libya was interested in more foreign investment.

"We would like to have a participation from foreign and local private business so we can see results because we would like to have competition among the business," he told Reuters.

However security remains a concern. Bouts of violence are deterring foreign firms from bringing back all their expatriates on the ground for now. For those who were once used to living in villas or flats in Tripoli, they now find themselves confined in secure compounds without their families.

Many businessmen travel with security advisers.

Libya's interim government has struggled to impose its authority on a country awash with weapons. Attacks on diplomatic and aid missions in the east have highlighted the ongoing volatility.

Last month, Tripoli's international airport was seized by an armed group for several hours.

"Security is a concern and when you hear of such violent incidents as we have recently, you worry and it may deter some foreigners from coming here," one European businessman said during a recent trip to Tripoli.

"But you have to weigh the risks against the opportunities."

Source: Reuters 

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

Dubai Chamber eyes Libyan trade opportunities

The Dubai Chamber of Commerce and Industry will lead a trade mission to Libya before year-end to assess investment opportunities, a senior Dubai Chamber official has said.

Speaking to Gulf News on the sidelines of the Libya Development Forum, Atiq Juma Naseeb, senior director of Commercial Services Sector at the Dubai Chamber, said: “Libya has strong potential for our members and the mission would serve as a platform to acquaint Dubai business professionals with the Libyan market.”

The delegate is made up of Dubai prominent businessmen and SME operators from different sectors, he said.

“The dramatic change in Libya marks a new era and the chance for foreign partners to assist in the rebuilding of a nation is required. Thus, Dubai is looking to drive investment in the country and aid our local businesses in penetrating and showcasing their products and expertise to their target markets.”

Officials from the UAE, and Dubai in particular, have made several instructive visits to Libya to examine how they can play an active role in the country’s development vision.

“As banking, construction, tourism and telecommunication are presenting major opportunities for investment, Dubai is well placed to assist since it has significant expertise in these sectors,” he said.

“One major opportunity for trade is going to come from Libya’s reconstruction efforts, with demand for rebar, cement, wood, iron and steel as well as technical expertise set to increase. Dubai has a strong industrial manufacturing base and excellent export and logistics facilities, so is ideal to meeting this increased need.”

Trade volume

“One area of investment that has significant potential and which Dubai has a major advantage is trade. Dubai’s trade with Libya has increased steadily since an end to international sanctions in 2005. Then Dubai’s exports to Libya valued Dh2.8 billion and imports Dh0.3 billion, but moving forward to 2010, Dubai’s exports [stood at] Dh3.5 billion and imports [at] Dh4.1 billion. “

Last year, Dubai’s non-oil trade with Libya reached Dh2.13 billion between January and October — a slight decline due to the impact of political unrest.

However, Naseeb added that the unrest had not proved to be as damaging as first anticipated.

“Dubai’s main imports from Libya are precious stones, which account for almost 96 per cent of the total. Meanwhile, Dubai’s exports are much more diversified, with electrical equipment, machinery and vehicles making up around 70 per cent and the remaining 30 per cent made up with categories that account for less than 2 per cent each,” he said.

Source: Gulf News

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

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 

Wintershall's Libya oil output at 70,000 b/d; builds pipeline

Germany's Wintershall is currently producing just over 70,000 b/d of oil in Libya, or around 70% of its output level from before the civil war in the North African country, a senior company official said Monday.

Speaking at a conference in London, Wintershall vice president Klaus Langemann said the company's output was being restricted by infrastructure constraints and that production would rise once a new oil export pipeline in Libya was completed.

"We are at more than 70% of our original production capacity, and we are producing a little beyond 70,000 b/d," Langemann told the conference.

Before the unrest in Libya began in February 2011, Wintershall was producing around 100,000 b/d from its fields in the country. 

Langemann said the company's production facilities suffered no damage during the civil war, and that it was able to boost production up to around 50,000 b/d within a week of the end of the war.

He also said that Libya had asked Wintershall to help build a new export pipeline together with the state-owned NOC and Agoco.

"We acted quickly, and the pipeline is now under construction," Langemann said. "It will be finalized early next year."

This will help the company restore its pre-uprising output, Langemann told Platts later on the sidelines of the conference.

"It's just a question of pipeline infrastructure," he said. "The wells could produce more -- indeed our reservoir engineers told us the shut-in had helped the reservoir 'relax', which is a good thing." 

EXPLORATION EFFORTS

Langemann also said Wintershall was committed to a long-term future in Libya, although he said the company's exploration efforts would depend on the terms offered for new blocks.

"The terms are tough in Libya," he said, referring to the EPSA IV contract system.

"In the last rounds it was shown that companies over-bid," he said.

Libya has Africa's largest oil reserves, estimated at some 47.1 billion barrels, and there is expected to be a concerted effort by international companies to increase exploration with a view to developing the country's resources since the death of former Libyan leader Moammar Qadhafi.

Asked whether Wintershall would take part in any future exploration bidding rounds in Libya, Langemann said: "We wouldn't rule it out." For now, though, Langemann said the political framework for expanding Libya's oil sector was not yet in place.

"The decision-making regime is not there at the moment," he said.

Separately, Langemann also said Wintershall was looking at projects in the UAE, specifically bringing in technology to help Abu Dhabi improve its oil recovery rates.

He said Abu Dhabi currently is short on gas as it reinjects large volumes to help oil production.

"Looking at Abu Dhabi, they are deficient in gas -- we can bring the know-how on enhanced oil recovery to allow them to use gas for the domestic market," Langemann said.

Wintershall signed a memorandum of understanding with the head of the Abu Dhabi National Oil Company (ADNOC) in May 2010 on possible joint exploration and development of a gas and condensate deposit in Abu Dhabi.

Source@ Platts