LIBYA: COMMERCIAL ROUND UP, AUGUST-SEPTEMBER 2006

UNCLAS SECTION 01 OF 02 TRIPOLI 000563

SIPDIS

DEPTARTMENT FOR NEA/MAG, COMMERCE FOR NATE MASON

E.O. 12958: N/A
TAGS: BEXP BTIO ECON EFIN EIND EINT EINV ENRG EPET
ETRD, LY
SUBJECT: LIBYA: COMMERCIAL ROUND UP, AUGUST-SEPTEMBER 2006

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Oil and Gas Sector
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1. Sources indicate that the National Oil Corporation (NOC)
plans to introduce measures to require foreign companies
operating in Libya to offer Libyans salaries equal to those paid
to non-Libyans. (Source: NOC, 8/21)


2. Libya and Japan signed a memorandum of understanding on
cooperation between the two countries in the fields of oil and
gas, as well as nuclear and solar energy. The memo also calls
for cooperation between the two countries in transportation,
communications, tourism, environment and human resources. The
two sides also discussed the possibility of financing an oil
pipeline to link the south of Libya with the entrance to the Red
Sea. (Source: Akhbar-Libya.com (quoting the Emirates News
Agency),8/20)


3. NOC has announced a third round for exploration and
production of oil in Libya (EPSA-IV Round). The new round
includes 14 areas and 41 sections, for a total area of
approximately 100,000 square kilometers. NOC will announce the
results on December 20, 2006. (Source: Almanara.org (quoting
aljazeera.net),8/15)


4. An official Libyan source announced August 14 that the
executive manager of Chevron expressed his company's readiness
to transfer oil technology to Libya through its oil projects in
the country. He also stated that his company will work to make
use of and to train the Libyan workforce. (Source: Almanara.org
(quoting Alquds Alarabi Newspaper),8/15)

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Construction and Infrastructure Development
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5. Ranhill Bhd secured a deal worth $2 billion to construct a
new township in Tajura, near Tripoli. Sources familiar with the
company said that the engineering group is also aggressively
pursuing a similar contract in Libya worth $1.5 billion, in
addition to exploring oil and gas opportunities and a railway
contract. Under the Tajura township contract, Ranhill will
build some 40,000 homes for a Libyan government housing agency.
"It is a straightforward housing project, but one that would
open further opportunities for Ranhill," one source reported.
"The company is taking a holistic approach in bidding for jobs
that all of its units can take part in." Sources also said that
Ranhill expects to receive a start-up fund from the Libyan
government of between 15% and 20% of the contract value.
"Ranhill is making itself a preferred builder for the Libyan
government," the source said, "and has the first right of
refusal for several of the projects that the authorities have in
the pipeline." One source explained that the American decision
to lift sanctions on Libya has created opportunities for
construction companies. (Source: The Edge Daily, 8/23)


6. Libyana Mobile Phone Service provider signed an agreement
with the German D.T. Khun [transliteration] to develop services
and management. The contract will last for two years. Libyana
currently provides its services to more than a million
subscribers. (Source: Khaleej Newspaper, 8/14)

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Foreign and US Investment
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7. The General People's Committee decided August 22 to
establish a financial investment corporation. The establishment
will have a capital of 250 million dollars and will report
directly to the General People's Committee. The corporation is
intended to diversify income resources and increase revenues to
the Libyan treasury. (Source: LJBC.net, 8/23)


8. Libyan Secretary of Economy, Investment And Trade Tayyib
Safi Tayyib confirmed his country's willingness to learn from
the example of the United Arab Emirates in the management of
ports and free zones. In a speech before the second conference
on economic activities, Safi said that Libya must abandon the
foreign investor complex and learn from the experiences of
foreign companies and investors in transferring technology,
especially in management and banking. He stressed the
importance of exploiting Libya's high present level of oil
income, and of finding alternative income sources for the
progress of the country. (Source: Albayan Newspaper, 8/9)


9. Tameer Holding Co. announced August 9 a $20 billion project
in Libya. The project represents the biggest investment in the
Maghreb from the Gulf region. The contract was signed by Omar
Ayesh from Tameer and Hamed Alarabi Alhudeiri from the Economic
and Social Development Fund. (NOTE: Tameer and the Economic and
Social Development Fund have formed a joint company, called
Tadweer, or the Libya Real Estate Development Company. END
NOTE.) The project will be located in the Wadi Sharki area on
the outskirts of Tripoli. It covers a beachfront area of more
than 40 square kilometers. It will consist of a complete city
with commercial centers and tourist attractions, as well as
schools and hospitals. Some of the buildings are designed to
accommodate the most advanced technologies available. The city
will serve a population of about half a million inhabitants.
(Source: Libya-Alyoum.com, 8/10)

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Tourism
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10. Secretary of the General People's Committee Dr. Elbaghdadi
Elmahmoudi and the General Manager of the Swiss holding company
Piroco [transliteration] announced that they will begin building
the Andalus Tourist Center in Tripoli. Libyan Tourism Secretary
Ammar Iltayyif attended the ceremony, along with the Swiss
Ambassador to Libya. The project is a joint venture between the
Economic and Social Development Fund in Libya (30%) and the
Swiss company (70%). The tourist resort will cover an area of
four hectares and include a 600-bed, five-star hotel. The
project will start in December, 2006 and is expected to require
four years to finish. It will also include a harbor big enough
for 250 yachts. The project, whose total value is 200 million
euros, is expected to provide 1000 job opportunities to Libyan
employees. The Swiss company's investment period will last 70
years. (Source: Almanara, 8/31)

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Banking
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11. Qatar National Bank announced August 29 that it has
received official permission to open a representative office in
Libya. (Source: Libya-Alyoum.com, 8/30)
BERRY