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Alarabonline: Libyan market opening for business

17 June 2007

Colonel Qadhafi has compared the Libyan economy to a bucket with holes in it; you keep pouring things in but it never seems to be full.

A few years of higher oil prices have given Libya relatively high spending power. With a population of not much more than 5 million it has reserves of over $50 billion. Unlike other oil and gas producing countries in the region Libya has very large unexplored areas which are attractive to the oil and gas industry, and has offered terms which have had the international companies queueing up. Over 30 new ones from all over the world entered the Libyan market last year, joining American companies which have returned and European companies which never left. Already they are finding oil and gas, and of course spending on everything from catering to mine clearance. Libya itself is spending more on much-needed infrastructure. Although the thrift learned in the difficult years of low prices combined with UN sanctions is not unlearned overnight, it seems inevitable that this process will accelerate.

The MEC international has produced an annual report on opportunities in the Libyan market since 1999. This year’s report was launched in the London offices of Fulbright and Jaworski on 16 May, and was sponsored by HSBC and Shell. HSBC along with the Qatar National Bank has been one of the first to take advantage of the opening up of Libya by establishing a branch in Tripoli. Shell is the first of the supermajors to take part in developing Libya’s gas, as well as oil. BP may not be far behind, and ExxonMobil has already acquired acreage in the recent bidding rounds, Libya’s strategy is to run production up from its present levels of around 1.7 million barrels a day to 2 or even 3 million.

The Prime Minister has recently reaffirmed the Government’s support for the Libyan British Business Council. The LBBC ran a successful business mission to Libya last year and will take its second mission there after Ramadan, in December. Such missions offer both established companies and new entrants to the market an invaluable opportunity to meet high-level decision-makers in what remains a difficult market.

The MEC report has established itself as the market leader. The characteristics of the Libyan market mean that information is at a premium. The aim is not only to cover business news in the sense of deals that have been done over the last year, but to provide essential information about the political and cultural background, as well as practical information about matters such as customers and freight handling.

-Alarabonline-

http://english.alarabonline.org/display.asp?fname=2007%5C06%5C06-17%5Czbusinessz%5C979.htm&dismode=x&ts=17/06/2007%2001:21:48%20%C3%A3

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