Libya opens door to UAE oil companies

UAE oil and gas companies are positioning themselves for a move into Libya, encouraged by assurances that they will receive preferential treatment as payback for the Government's support of anti-Qaddafi forces during last year's civil war.

"We have been told very clearly: the authorities are encouraging UAE and Qatar companies. They want to give them business opportunities, so we want to take advantage of this," said Nabil Alalawi, the chief executive at AlMansoori, an Abu Dhabi oilfield services provider. "Our strategy is to become a very dominant player in Libya; we were a minor player in Libya [before the war]."

The UAE was an early supporter of the rebels and provided humanitarian assistance during the conflict.

Libya is ruled by an interim government, which emerged out of the National Transitional Council that led the struggle against the Qaddafi regime. With a temporary political leadership, uncertainty persists over the level of resources the government will put into rebuilding and expanding the hydrocarbon sector.

Abdul Rahman ben Yezza, the oil minister, said last month that Africa's largest crude producer aimed to raise its capacity to 2 million bpd within five years, but the country also requires huge investments in infrastructure.

"The big problem we see with Libya that will affect our business is, will they have the money to fast-track their developments?" Mr Alalawi said. "Right now, they want as much money as possible to build the country, and not reinvest in oil and gas."

The provisional leadership has pledged to hold elections in April, and Mr Alalawi expects that his company will be able to start taking advantage of spending by the new government in the third or fourth quarter of this year.

AlMansoori is already active in Libya, fulfilling service contracts for France's Total and Italy's ENI, the country's biggest producer. But frustration over endemic corruption led Almansoori to reduce its presence even before the fighting led to the exodus of international companies.

"Libya has been one of the most corrupt places we've ever confronted," Mr Alalawi said. "The new authorities have more or less told us that they will do business on a professional basis and with integrity. But like they say, the proof [of the pudding] is in the eating."

Another UAE company that has a presence in Libya's oil and gas sector, and is mulling an expansion of its activities, is Al Ghurair Group. Al Ghurair is part of the Libyan Emirati Refining Company, a joint venture that owns a refinery in the coastal town of Ras Lanuf. Eisa Al Ghurair, the vice chairman of Al Ghurair Investment, last month revealed that the group planned to invest US$2 billion (Dh7.34bn) in revamping and expanding the Ras Lanuf asset, and constructing a refinery in Pakistan.

(Source: The National)

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