Libya's state-run National Oil Corporation (NOC) has agreed to review its joint venture with its UAE partners in the Ras Lanuf [Ras Lanouf] refinery, according to Libya Herald.
The announcement followed demonstrations outside NOC’s Tripoli headquarters by refinery workers demanding that the government reject a 20-month extension to the existing agreement with the Libyan Emirati Refining Company (LERCO) and to hand management back to the Libyans
The workers were also demanding a speeding up on investment in over-due upgrades for Libya’s largest refinery, which resumed operations in September after the NOC reached a deal with UAE-based Trasta Energy, its 50/50 partner.
A range of disagreements had bedevilled NOC’s talks with Trasta, owned by the Abu Dhabi’s Al-Ghurair Group. Last June, on a UAE business mission to Libya, Abdelaziz Al-Ghurair, the son of the conglomerate’s founder, announced that it was prepared to invest $1.2 billion upgrading the 1984 refinery, which has a design capacity of 220,000 b/d. However despite repeated announcements of a new re-start date, the facility remained shut down until six months ago.
Sources close to the talks last year indicated that the UAE side was resisting attempts by NOC to revise a 2006, 25-year fixed price supply contract, which even Qaddafi’s investigators concluded gave LERCO “unjustified discounts”.
However one analyst commented: “ The key issue is the costly upgrading and NOC has many calls on its funds. If Trasta can commit and get on with the work, which I understand is not yet fully scoped, and put in its funding in full, NOC’s attitude might soften, despite this rising public mood that foreigners ought to own nothing in the country”.
(Sources: Libya Herald, Bloomberg, CNBC)