New Tunisian – Libyan level of business cooperation gives the Tunisian economy a boost.
Libya is on track to regain its prewar oil pumping levels of 1.6 million barrels per day (bpd) next month, a top official of the transitional government has said.
"From 400,000 [after the war], now we reach rapidly 1.5" million bpd, Mustafa El Huni, the deputy chairman of the National Transitional Council (NTC), said at a conference in Dubai yesterday.
"We hope after one month we will go back to our old level of production, which was about 1.65 million barrels per day according to our quota in Opec."
The news comes as oil markets, in which Libya accounted for about 2 per cent of supply before last year's revolution, are already being pushed down by economic fears in Europe and China. Yesterday, Brent, the European benchmark, was trading at US$111 a barrel.
The NTC, a temporary guardian government, has set aside 38 billion Libyan dinars (Dh109.95bn) of its 68bn dinar budget this year for rebuilding efforts in sectors including oil, communications and health care.
Next month, Libya is to elect its first national assembly, whose 200 members are tasked with drafting a constitution.
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A Belgian trade delegation will arrive in Tripoli this week to discuss investment opportunities between Belgium and Libya.
Tripoli - Months after rebels brought down the extravagant dictatorship of Muammar Gaddafi, the disarray in Libya's state finances at the end of last year was so bad the new leadership did not know the size of state assets, how their money was being spent, or what had happened to more than $2bn transferred from the sovereign wealth fund.
Libyan officials say the anomalies in the state's finances revealed in the document were the result of complex accounting rules, delays in settling bills and poor communication between government departments - not by money being misused or stolen.
But campaigners for financial transparency say that the disarray in tracking government finances creates a fertile environment for abuse to ccur, particularly when Libya is now earning over $2bn a month from selling crude oil.
"The proper management of public finances, especially oil revenues which make up 90% of government revenues, is crucial," said Giulio Carini, a campaigner with the international anti-corruption group Global Witness.
"Any lack of transparency and accountability... fuels mistrust and suspicion that the interim and any future government of Libya is not taking the necessary steps to reverse the past legacy of mismanagement."
Libya has lacked a strong, central government since the rebellion, backed by Nato jets and missiles, ended Gaddafi's 42-year rule last year.
International concern about the new Libya has focused on security issues: out-of-control militias clashing with each other, weapons being smuggled across poorly-secured borders, the threat of Libya splitting into regional fiefdoms.
But there is another risk too, that in the muddle of the transition in Libya, millions and possibly billions of dollars in state assets could be misappropriated.
The NTC document, which was obtained by Reuters, relates to state finances several months back, under a government that has since been replaced. Nevertheless, high-profile corruption scandals since then indicate that the government's shortcomings with keeping track of money have still not been resolved.
In November last year, the NTC's economy and finance committee, which provides oversight over the work of the interim government, submitted an internal report on the activities of the oil and finance ministries, the central bank and the sovereign wealth fund, the Libyan Investment Authority (LIA).
The seven-page report was dated 27 November 2011. It listed a litany of accounting holes, and failures by branches of the government to share information about th cash they were handling.
In one passage, the report's authors said they needed more information to understand how the central bank calculated the $139.9bn it said Libya held in assets abroad.
"The question is: what is the size of deposits and investments for the central bank alone?" the report asked.
In another section, it took the oil and finance ministries to task over their lack of transparency.
"The (oil and finance) department has not provided monthly reports identifying sources of available financial revenues, their use and the way cash balances are being dealt with," it said.
The two ministries had "not provided reports on oil export shipments and the amounts collected in return and how the amounts were spent".
It said also it had received no details on who in the public sector had been paid their wages and how much they were paid.
The NTC said in the document it had reports of "ambiguity" surrounding sales of foreign currency and contracts concluded with brokers and currency traders.
In a different section, the report's authors addressed the LIA. The document queried $2.456bn which the LIA said it had handed over to the treasury, but had, it seemed, not shown up on the government's books.
"When have they (the LIA monies) been transferred to the treasury, how have they paid and to whom have they been paid?" the report asked.
The NTC complained that the sovereign fund was keeping it in the dark on other issues as well. It said the fund provided it with no details on assets held in stocks, bonds or investment funds, including those funds which had registered multi-million dollar losses.
In the report, the NTC committee said it had no information on why the LIA's assets had shrunk. "Total (LIA) resources after 2010 allocations were $65bn, how did it become $62.956bn?" the report asked.
Money 'not misused'
Asked to comment on the shortcomings raised in the report, NTC spokesperson Mohammed al-Harizy acknowledged that "communication is very weak between the NTC and the government".
He said the NTC had set up a special oil committee, which started work in April, to improve oversight over crude exports and the revenues earned.
Harizy said there was "no control over the international investments", and government schemes to provide assistance to people who fought Gaddafi in last year's revolt have seen cases of corruption at local level.
But at the ministry level, he said: "I don't think the money is being misused... The oil revenue is turned over to the finance ministry right away so I don't think there are problems."
Asked about the allegations of "ambiguity" with currency transactions, central bank deputy governor Ali Mohammed Salem said: "We had to sell dollars at a low price in order to bring the cash flow back into the banks."
An LIA official, Mohsen Derregia, told Reuters the authority could not immediately comment on the NTC document.
Ibrahim Belkheir, the head of the Libyan government audit bureau, said his office had looked into the issues raised in the report, including the LIA's financial statements, but said he could not disclose his findings.
He said though that most of the apparent financial discrepancies raised in the report could be explained by routine delays between oil export shipments being delivered and payment being received.
Belkheir, an academic before the revolt, has been given a leading role in trying to ensure that the pervasive corruption under Gaddafi does not carry over into the new Libya.
Already there are signs of graft. In one case, the government had to halt a scheme to give cash to people who fought in last year's rebellion because the money was being paid out to people who were dead or who never fought.
In another scam, fraudsters enjoyed state-funded vacations abroad by claiming to be wounded veterans of the fighting needing treatment in foreign hospitals.
The corner office where Belkheir works is steeped in symbolism. It was previously used by Hannibal Gaddafi, a son of the ex-Libyan leader famous for his extravagant lifestyle and raucous parties in five-star European hotels.
Belkheir said his organisation would root out corruption wherever it found it and had not faced any interference from the new authorities. But he acknowledged he faced a huge task.
"Corruption is not easy to uproot. It is a cultural issue that is prevailing among certain people," he said.
"As they are so used to it, it does not seem to be corruption to them."
According to Turkey’s official statistics TurkStat, Turkey’s exports to Libya has jumped to high levels since visa exemption agreement.
BUSINESS opportunities for UK companies are beginning to open up in Libya as the country recovers from the bloody civil war that deposed former dictator Muammar Gaddafi.
At an interview at the UK Embassy in Tripoli, Kevin Cunningham, head of UKTI in Libya, said that while economic and political development is now “entirely in the hands of the Libyans”, the UK has an important role to play in giving assistance, advice and “helping in any way we can”.
“Before the revolution British companies had around 2.2 per cent of market share in Libya,” he said.
“Clearly there was a reluctance to do business here for a number of reasons – transparency, the regime – but now the new Libya is absolutely open and an ideal environment for British companies to really demonstrate their value.”
The country was rocked in early 2011 when an uprising inspired by similar revolts in Tunisia and Egypt swept east from Benghazi to Tripoli and turned into a bloody conflict between Gaddafi’s henchmen and soldiers of the opposition National Transitional Council.
The conflict, which saw 30,000 Libyans killed, ended in October with the death of the dictator.
Now, as Libya begins to embrace significant foreign investment for the first time opportunities are opening up for UK firms across a range of sectors, particularly the oil and gas industry.
According to a report by BP at the end of 2010 – just weeks before the start of the civil war – Libya’s oil reserves stood at 46.4bn barrels, or 6m tonnes, making it one of the world’s most oil rich countries with a total global share of 3.4 per cent.
Mr Cunningham said a top priority was getting the oil and gas infrastructure operational to enable Libya to sustain itself and afford vital reconstruction work.
But with a post-conflict programme estimated to be worth around $200bn, other major areas of opportunity in the country include IT, communications, civil security, financial services and healthcare which he claimed had been underfunded and is stretched by those injured in the conflict.
“We’ve had three delegations of British companies over here from the healthcare sector working very closely with the minister of health on defining requirements ... placing the Libyans in a better position to be able to make decisions,” he said.
Despite the sense of optimism that pervades Libya, physical signs of conflict are everywhere.
But take a walk around Tripoli and you find for every bomb site there are five new construction projects under development, including hotels, flats and houses.
It is here Mr Cunningham said British companies could play a further role, by partnering construction firms in Tunisia, Egypt and Malta – all of which have a strong presence in Libya – to provide technical skills including design, project management and quality management.
“We are bringing companies here that we believe have the right solutions and (in areas) where our companies are very strong,” he said.
Good Travel Management is a corporate travel company headquartered in Hull which specialises in trade missions across the globe, particular to Libya, and has organised travel to the country for many companies.
Managing director Kevin Harrison said there were some strong indicators post-conflict Libya was now opening up for business.
“The commercial airways are beginning to fly to the country again, which is always a good sign,” he said.
“Visas are available for one month, three months and six months, and although Foreign Office advice on travel is unlikely to change before the election, we would be expecting it to be considered safe shortly after. With that in mind, we are looking to arrange a further trade mission there in September or October this year.”
• The author is a PR adviser to Good Travel Management.
Former rebel fighters opened fire outside the office of Prime Minister Abdurrahim al-Keib on 8 May, leaving one dead and a number of others injured. Benghazi remains calm, and there have been no major incidents over the last week. Libya began the first civilian trial of alleged Gaddafi supporters on 8 May, as five men accused of planning to create instability by “terrorist acts” appeared before a court in Zawiyah. Meanwhile, finance...
Security throughout the rest of the country will remain tentative. There is potential for further clashes in al-Kufra, and the south west near Sabha and the Murzuq oil basin. Smuggling across the western border will also remain an issue, and there is potential for clashes between rival smuggling groups, or with national security forces from Tunisia, Algeria and Libya itself.
The interim government will remain unstable until elections, and there is potential for some members to resign amid the ongoing corruption scandals and following pressure from the National Transitional Council (NTC). Tripoli One security officer was killed and four others – three security personnel and one demonstrator – were injured on 8 May when former rebel fighters protesting outside the Prime Minister’s office in the Tareeg Seka area of the capital began opening fire. AKE sources on the ground reported that former rebel fighters from the Yefren and Galaa areas of Jabal Nafusa entered the premises and began firing. Reports from the scene indicate that the rebels turned up with heavily armed jeeps carrying anti-aircraft guns, and demanded rights and compensation for former rebel fighters.
Members of the national security forces arrived at the location, and AKE sources at the scene indicated that the situation ended and traffic was transiting through the area normally only hours after the initial reports.
In a televised statement Prime Minister Abdurrahim al-Keib branded the attackers “outlaws”, claiming that they intended to take money by way of compensation that they did not deserve.
Personnel should be aware of the risk of further incidents of this nature involving disgruntled former rebel fighters, who feel they are not being properly compensated for their sacrifices during the revolution. Clashes are most likely to occur around high profile government buildings in the city, although regular rallying points such as Martyrs’ Square and major hotels could also see shows of force by the rebels.
The compensation issue has taken on more significance over the last month, since the government ended a controversial programme that provided financial recompense to former rebel fighters. The scheme was marred by accusations of corruption, and so the government cut the payments.
Benghazi Benghazi remains calm, and there have been no major incidents of note over the past week.
However, personnel should be mindful of the risk of demonstrations that can cause disruption in central areas of the city. AKE personnel on the ground have long highlighted the potential for disruption caused by strikes and demonstrations in central areas of the city, a fact that may become all the more apparent in the run-up to elections in June.
Large political gatherings can have the potential for violence, and there have also been a number of small scale bomb attacks at similar events in recent months.
Trial of Alleged Gaddafi Supporters Begins A court in the town of Zawiyah began the first civilian trial of alleged Gaddafi supporters on 8 May. Five men accused of planning to create instability by “terrorist acts” appeared before the court, however the trial was adjourned for a week after a request by defence lawyers. The men were reportedly arrested in Zawiyah, and are alleged to have been planning to carry out terrorist attacks in the country in order to create instability. Some have apparently confessed to fighting on Gaddafi’s side.
Although these are the first trials to take place in Libya, a number of other high profile trials, including that of Gaddafi’s son Saif al-Islam, could also take place on Libyan soil. This will therefore be scrutinised by international observers keen to know how capable the current legal apparatus is to handle a high profile case. Political Section Finance Minister Hassan Ziglam stated on 10 May that he would soon resign due to the degree of “wastage of public funds” by the interim government. Ziglam cited the now halted scheme to compensate former rebel fighters, as well as the ongoing pressure from them for payment as a major reason for his resignation. A number of demonstrations by former rebels have turned violent as the government has failed to meet their demands for compensation and further employment.
The issue was reportedly the main grievance of former rebel fighters who attacked the Prime Minister’s office in the Tareeg Seka area of Tripoli on 8 May. Similar, although less violent, demonstrations have occurred outside government buildings on a number of occasions, while there have been accusations of corruption inside the interim government, with some of the alleged recipients of money from the now-ended scheme being ineligible.
Some LD1.8 bln (US$1.2 bln) was spent in three months of the programme, and an NTC statement claimed that not only were some of those on the list ineligible, others were also dead.
Meanwhile, interim leader Mustafa Abdel Jalil stated on 5 May that his doctors had ordered him to rest because of a minor health problem. He also stated that the problem was not serious, and was due to the amount of work that had been required of him during the transition process.
AKE is a leading international security risk-mitigation and analysis provider to international businesses, insurers, NGOs and news media. Founded in 1991 by Andrew Kain, AKE distinguishes itself from other security firms by taking a needs- and intelligence-led approach to assessing, monitoring, training for and protecting against risk. For security assistance on the situation in Libya please contact firstname.lastname@example.org or call +44 (0) 1432 267 111. For intelligence contact email@example.com further information.
The Azerbaijan government has proposed the rebuilding of petrol stations and a oil refinery in Libya.
More than a million people have registered to vote, ahead of Libya's first general elections. But parties and candidates say there are still many problems ahead of next month's vote. Omar Al Saleh reports from Tripoli.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email firstname.lastname@example.org to buy additional rights. http://www.ft.com/cms/s/0/68bdd5f8-9cef-11e1-aa39-00144feabdc0.html#ixzz1upkel0Sl British companies are gearing up to compete for billions of pounds worth of contracts in Libya as the oil-rich...
Ahead of elections for the new government expected to be held in June, businesses, officials and advisers are converging on London on Monday for a one-day conference on how companies can best position themselves to win a series of lucrative tenders expected to be awarded over the next few years.
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Despite continuing security concerns, British companies have started to return to Libya this year including Rentokil, the pest controller; British Airways, which has restarted flights; and PwC, which is sponsoring the conference. G4S, the FTSE 100 security company, has also recently appointed Richard Northern, the UK ambassador to Libya during the Arab spring, as a senior adviser as it targets the north African nation for expansion. It is believed to have a won a €10m contract to provide bodyguards and security for the EU in the country. Much of Libya’s infrastructure is in a dire state, with transport, banking, telecommunications, power generation, education, water and sewerage systems in poor condition even by regional standards. Although its oil extraction infrastructure is considered the jewel of its industrial base, its refineries are widely regarded as outmoded and in need of upgrading. But Libya is also wealthy. Oil income exceeded $12bn in the first quarter of this year, according to official government figures, making reconstruction plans viable. UK Trade and Investment, which promotes British commercial interests abroad and is backing the conference, has estimated that the rebuilding of Libya could be worth £126bn over the next decade. With the stock market only recently reopened and the transitional government wary of signing contracts, no one expects the transition to happen over night. Mott MacDonald, the British engineering company that has kept an office open throughout the uprising, said it would take time for institutions to re-establish themselves. Nevertheless, Chris Trinder, director at Mott MacDonald, added: “Although we don’t expect a lot of projects to suddenly start in the next three to six months, Libya is on the cusp of generating a lot of work beyond that period.” “There was a lot of work to be done in Libya before, and that hasn’t changed. So we are preparing for that to take off again soon because it still has the potential to be a big market.” Many companies have held on to contracts put on hold during the Arab spring in the hope that the projects will be restarted. Rentokil said it had been operating in the country again since the start of the year and was engaged in discussions towards reactivating an agreement to provide rodent control for the Libyan government. Some contracts had already come back on stream, particularly in oil and gas projects that are key for the revival of the Libyan economy. Raid Abu-Manneh, partner at Mayer Brown, a law firm, said “payments had been honoured and progress made”. But he added that it remains a “wait and see” situation until after the election. The transitional government has pledged to honour existing deals but any termination of contracts could lead to a raft of legal cases as contractors sue for things such as lost equipment, delayed payment and the cost of uprooting offices and staff. “Not many construction disputes have erupted yet as contractors bide their time,” said Mr Abu-Manneh. “But they may have haemorrhaged money from projects being put on hold as a result of the events in Libya and there may be a surge in claims after the election if the situation is not resolved.” Security woes remain an impediment to luring foreign investment. Libyans are generally welcoming to foreigners, and westerners have so far not been the target of any attacks. But armed groups continue to roam the land, with decades-old rivalries sometimes exploding into gun battles. The interim government has yet to assert its authority over many of the militias that drove Muammer Gaddafi from power, although the situation may stabilise following scheduled elections on June 19.
The Libyan Minister of Electricity and Renewable Energy, Dr. Awad Ebrik, has visited the United Arab Emirates to discuss the Emirati experience of clean technology.
According to figures issued by Turkey's country's statistics authority, TurkStat, Turkish exports to Libya, Russia, Jordan, Syria, and Albania were up in the last three years after visa exemptions were introduced.
Turkey and Libya launched visa exemptions on April 19, 2009 and xports rose to 1.9 billion from 1.8 billion between 2009 and 2010. However, Turkish exports to Libya notablydecreased due to Arab Spring and fell to 747.7 million USD in 2011. Turkey earned 526 million USD from its exports to Libya in the first quarter of 2012.
Although Turkish exports to Libya saw a slight decrease in 2011, they continued to increase in the first quarter of 2012.Turkish exports to Russia rose to 4.6 billion USD in 2010 and to 6 billion USD in 2011. They were around 3.2 billion USD in 2009.
Turkey and Russia lifted visa procedures for trips of up to 30 days on May 12, 2010, and as a result, Turkey earned 1.5 billion USD from its exports to Russia in the first quarter of 2012. Turkey and Albania lifted visa requirements under a memorandum of understanding they signed on November 20, 2009. Turkish exports to this country decreased to 241 million from 273.1 million between 2009 and 2010 due to global financial crisis, but they rose to 270.7 million USD in 2011, and Turkey exported goods worth 64.8 million USD in the first three months of 2012.
Turkey also lifted visa procedures with Syria on October 17, 2009, and its exports to Syria were 1.4, 1.9 and 1.6 billion USD respectively in 2009, 2010 and 2011. Turkey exported goods worth 172 million USD to Syria in the first quarter of 2012. [Source Tripoli Post]
Among the distinguished delegates visiting Libya this week, a Korean delegation arrived in Tripoli to discuss reviving Korean business activities in Libya.
MADRID (MarketWatch) -- Spanish oil company Repsol YPF SA said Thursday its first-quarter net profit--including its Argentine unit--grew 3.5%, largely due to higher oil prices and production in Libya returning to relatively normal levels.
The Libyan Minister of Economy Ahmed al-Koshly has met the Russian ambassador in Libya to discuss new horizons for economic cooperation between the two countries.
A number of businessmen assured CNN that Libyan economic life in Tripoli is now fully recovered.
VIENNA (Reuters) - Austrian energy group OMV's first-quarter profit beat expectations as rising output from Libya helped earnings grow.
That beat even the highest estimate in the poll.
Libyan production at the end of April was running at 85-90 percent of levels achieved before the uprising against Muammar Gaddafi, OMV said on Wednesday, adding it expected "fluctuations" in output there.
Chief Executive Gerhard Roiss said stronger oil prices and the very cold central European winter supported results in the quarter, while he expected margins for refining and marketing margins to remain under pressure this year.
Output from Libya, recovering from the turmoil of civil unrest, helped OMV boost production to 299,000 barrels of oil equivalent per day (boed) in the first quarter from 289,000 in the previous quarter, OMV had said last month.
Average production in Libya was around 25,000 barrels per day (bbl/d) in the quarter. This was partly offset by reduced production in Romania and lower volumes in New Zealand.
Libya had provided a tenth of OMV's global output in 2010, but production fell sharply when the revolt against Gaddafi's rule broke out, forcing OMV to withdraw staff for security reasons. OMV has a long-term stake there with 12 exploration and production licences and petroleum contracts running up to 2032.
The first quarter also saw the first successful Black Sea well, which OMV said in February could be its biggest gas find ever.
OMV shares have been trading at around 5.8 times 12-month forward earnings, according to Thomson Reuters StarMine, which weights analysts' estimates by previous accuracy.
That puts it at a discount to peers like Repsol, Eni and Total at 6.4 to 7 times.
FRANKFURT, May 7 (Reuters) - Libya's oil sector sent 469,000 tonnes of crude to Germany in March, down from 779,000 tonnes in February but putting it fifth-highest in Germany's oil imports, economic and foreign trade statistics office BAFA data showed on Monday.
The Ministry of Industry has declared the successful manufacturing of the first Libyan bus after the revolution.
Registration for next month's elections is taking place in Libya. It's the first stets towards achieving democracy after the fall of Muammar Gaddafi, but already various groups and ensuring they're voices will be heard. Al Jazeera's Alex Gatopolo