LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008

UNCLAS TRIPOLI 000912


DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON; ENERGY FOR GINA ERIKSON; CAIRO
FOR CLARENCE (ALEX) SEVERENS

E.O. 12958: N/A
TAGS: EINV EIND ECON EMIN ENRG EPET ETRD PGOV LY
SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008

OIL AND GAS


1. (U) A New Oil Discovery by Sirte Oil Company: On October 7,
Sirte Oil, a state-owned company, announced a new oil discovery
in the well A1-NC216A in the Ghadames Basin. The well is located
approximately 310 km southwest of Tripoli. The initial
production testing established an oil rate of 1,725 barrels per
day, and a gas rate of 0.25 million standard cubic feet per day.
This well represents the company's first discovery in the block.
[noc.com.ly, 10/7/2008]


2. (U) Russian-British Firm TNK-BP Seeks to Develop Major Libyan
Oil Field: After a conflict between the oil company's Russian
and British shareholders was settled, TNK-BP received the right
to compete with BP in international projects. TNK-BP is
negotiating to develop Libya's Sarir field, one of the largest
oilfields in Libya located about 500 kilometers east of Tripoli
in the Sirte Basin. TNK-BP is ready to sell $1bn-$2bn to obtain
the status of operator of Libya's Sarir project. The
Russian-British oil producer is now in talks with Libya's
National Oil Corporation (NOC) regarding the development of the
Sarir field. In September, a delegation of TNK-BP top executives
visited the country to hold cooperation talks. However,
investment in the Libyan oil project, which may total between
$1bn and $7bn, has yet to be approved by TNK-BP's new CEO.
[oilandgaseuroasia.com, 10/21/2008]


3. (U) WesternGeco Wins Libyan Seismic Deal: WesternGeco, part
of oil field services giant Schlumberger, has won a contract
from Russia's Gazprom to gather 3D seismic data on its Ghadames
Basin acreage in Libya. WesternGeco says the survey will start
in November, with data to be processed in its new processing
center in Tripoli. Gazprom was awarded offshore Area 19 in the
Libyan third oil and gas exploration licensing round last year.
[MEED, 10/22/2008]


4. (U) Fourth Forum and Exhibition of Oil and Gas Technologies:
The forum and exhibition took place in Tripoli from October 20
to 23. The event was sponsored by the NOC and organized by the
Libyan Oil Institute. 120 international companies operating in
the oil and gas industry from 20 countries as well as Libyan oil
companies participated in the event. The exhibition aims to
contribute to the communication between the parties of the oil
and gas industry, and their counterparts in the international
oil and gas industry, and to get an access to the latest
techniques and methods in exploration, production, maintenance,
marketing, and consuming. [noc.com.ly, 10/22/2008]


5. (U) Foster Wheeler confirms Libyan Refinery Deal: The U.S.
company Foster Wheeler has been awarded a project management and
consultancy contract for the development of a $4 billion,
200,000 barrel a day refinery in Zwara, western Libya. Foster
Wheeler says the Zwara refinery is expected to be completed by
2014; producing gasoline, jet fuel and diesel. The client is
Zwara Oil Refining Company (Zorco),a project company in which
Libya's state-run Tamoil Africa Holdings has the equity. Foster
Wheeler says its contract includes the refinery configuration,
the selection of the licensors and the front-end engineering and
design (FEED) phase, including preparation of a cost estimate.
The firm will also prepare the tender documents for the
engineering, procurement and construction (EPC) phase, assist
Zorco in selecting the EPC contractor and act as project
management consultant during construction. The refinery, located
near the Tunisian border, will boost the country's refinery
capacity to nearly 600,000 barrels a day. [MEED, 10/30/2008]


CONSTRUCTION


6. (U) Al Maabar Plans $11.5 billion Investments: Abu
Dhabi-based Al Maabar International Investments has lined up
overseas investments worth $11.5 billion over 10 years. The
investments will be in real estate projects in Morocco, Libya,
Tunisia, Qatar, Belarus and Jordan. The projects in Libya and
Morocco are to be immediately funded. The rest of the projects
are long-term; they are now either under initial master plan or
are going into detail design. [gulfnews.com, 10/5/2008]


7. (U) Hill Signs $42 million Libya University Project: U.S.
company Hill International has signed a $42 million contract to
provide construction supervision services at a university
expansion project in Tripoli. The 21-month contract from the
Libyan Organization for the Development of Administrative
Centers is part of a $2 billion expansion of Al Fateh
University, Libya's largest institute of higher education. Under
a 2007 agreement, Hill already provides project management
services for the expansion, which will add 17.9 million square
feet of space to 39 buildings. [njbiz.com, 10/12/2008]


8. (U) Libyan Iron Steel Company Signed a Contract to Establish
a New Factory for Iron Bars Industry: Libyan Iron Steel Company
(LISCO) signed a contract to establish a new factory for iron
bars with a production capacity of 800,000 tons a year and at a
cost of $240 million. After completion of the project, the total
production will reach 1.8 million tons against 500 tons a year
in 2007. LISCO has signed contracts with specialized Italian
companies to get this project executed. The project is expected
to be finished in about 30 months. [MEsteel.com, 10/19/2008]


9. (U) ESDF, Asamer Launch First Concrete Plant: Libyan Cement
Manufacturing Joint Venture Company (JLCC),a joint venture
between the Economic Social Development Fund (ESDF) and the
Austrian Asamer Group Company, launched the first concrete plant
in Tajura. The Tajura concrete plant is the company's second big
project launched in Libya. The first one was the cement plant in
Benghazi with a minimal capacity of three million tones of
cement. [Tripoli Post, 10/19/2008]


10. (U) Turkey's Floating Fair Carries Machinery and
Construction Industry to North Africa: Floating Fair Bluexpo's
journey included four important trade centers of North Africa;
Alexandria in Egypt, Tripoli in Libya, Tunis in Tunisia, and
Algiers in Algeria. About 3,500 sector professionals visited the
fair located in two ferries; the exhibition involved 150
businesspeople from Turkey who came to Libya under the umbrella
of the Turkish Contractors Association. Bluexpo North Africa
Construction project aims to provide business opportunities to
Turkish companies supplying service and materials in
infrastructure and building industries, which have an investment
priority in the North African countries. [adg.com, 10/20/2008]


REGIONAL ISSUES


11. (U) More Cooperation in Electricity: Egypt and Libya agreed
on boosting joint cooperation in electricity production. The
agreement was reached at a meeting between Egypt's Holding
Company for Electrifying Egypt and a visiting delegation of the
Libyan electricity authority. The two sides reached an agreement
on Libya's contribution in implementing a power generation plant
in southern Giza area at a total capacity expected to reach
1,300 megawatts. The plant will start operation in 2012. It was
also agreed that Libya will contribute to other electricity
projects in Egypt. [ANSAmed, 10/1/2008]


12. (U) U.S. Opens Trade Office in Libya: on October 5, the
American Commercial Service Office was opened in Tripoli to take
part in promotion of the economic cooperation among the
different Libyan and American institutions. Libyan officials and
businessmen from both countries attended the office's opening.
The American Assistant Secretary of Commerce underlined the
importance of this office to strengthen economic and commercial
ties between both countries, clarifying that the office is a
good move to boost cooperation and bilateral commercial
exchange. The Under Secretary of the General People's Committee
for Economy, Trade and Investment said that this office will be
a means to provide the institutions and companies with
sufficient information about commercial and economic laws and
legislations applied in both countries; provide the commercial
information required by the American companies that have the
desire to execute projects in Great Jamahiriya; and to provide
the American investors with information about the Libyan markets
and their needs. [ljbc.com, 10/7/2008]


13. (U) Libya Maritime Exhibition and Conference: The Libya
Maritime Exhibition and Conference (LIMEX 2008) was held at the
naval base in Tripoli from October 13 to 15. It showcased the
latest maritime technology by bringing together key industry,
government and defense personnel from Libya and Overseas. [ljbc,
10/16/2008]


14. (U) Finance Ministers and Central Banks Governors to Discuss
Global Financial Crisis on African Economy: The African
Development Bank called on African Union finance ministers and
governors of Central Banks to meet November 12, to discuss
repercussions of the global financial crisis on African economy.
The conference aims at taking a unified stance amongst African
Union member states in confronting the global financial crisis,
the bank said in a statement issued in Tunis. The statement also
said the African Development Bank and the African Union
Commission affirm that Africa's voice would be heard during
discussions on the reform of the World Bank and the
International Monetary Fund following the financial collapse of
the capitalist system. [ljbc, 10/26/2008]


IT


15. (U) Libyans Take to the Mobile Web: BuzzCity, which provides
global wireless communities and consumer services, has published
the Global Mobile Advertising Index, which shows the growing use
of the mobile Internet and the ensuing advertiser interest.
BuzzCity reports continued growth in Indonesia, which remains in
top position despite network irregularities, as well as
significant growth in Kenya, USA and Bangladesh. BuzzCity also
reports record growth for demand of its service in Libya, which
it says will surprise both the global mobile community and
digital advertising industries. Only six months ago Libya was in
93rd position. BuzzCity says the growth is likely to be directly
linked with changes in mobile operator business models, offering
affordable and understandable mobile data packages.
[mobilemarketingmagazine.co.uk, 10/14/2008]


INVESTMENT


16. (U) Libyan Investment Projects Increase: Resources in the
Board of Encouraging Investment mentioned that the size of
investment increased from $200 million in 2003 to $2.157 billion
in the first half of year 2008. The increase is varied in the
size of investment from one year to another and the year 2007
recorded the highest development average. It created ten
thousand opportunities of jobs to the national elements. The
projects were increased by a value of $1.5 billion in comparison
to $720 million in 2007. The number of investment projects that
entered the operations in the first half of this year provided
2,267 opportunities of employment for Libyans.
[libyaninvestment.com, 10/22/2008]


17. (U) Libya Eyes European, U.S. Equities: The Libyan
Investment Authority is looking to invest $65 billion in
European and U.S. equities to diversify its portfolio after
recent market declines. "We want to diversify, number one in
Europe, number two in the United States, and then in emerging
market economies," said Farhat Bin Guidara, Governor of the
Central Bank of Libya and a member of the board of the state's
investment authority. "We are going more towards
pharmaceuticals, telecoms, utilities and food manufacturing," he
told reporters on the sidelines of a conference in Cairo.
[Reuters, 10/24/2008]


BANKING


18. (U) Libya Buys 4.23% Stake in UniCredit: The Central Bank of
Libya, the Libyan Investment Authority and the Libyan Foreign
Bank acquired a combined 4.23% stake in Italian bank UniCredit
SpA (UCG.MI). According to UniCredit's spokesman, the
acquisition by Libyan interests is "friendly." The stake
initially held by Libyan interests in the Italian bank was
0.87%, the UniCredit spokesman said, with the rest being
purchased over the last few days. UniCredit shares have had
hardly any relief from selling and have lost 30% since the bank
announced its funding plans on October 5. Italian Premier Silvio
Berlusconi said he is concerned sovereign wealth funds from
oil-producing countries could launch a hostile takeover for
Italian companies, given their low valuations after the recent
sharp fall in the stock markets. [libyaninvestment.com,
10/19/2008]


19. (U) Egypt's Naeem Wins Approval to Open in Libya: Naeem
Holding, Egypt's second-largest publicly traded investment bank,
said on Sunday it had won approval to open a representative
office in Libya. The bank did not say when it would open the
office in a statement on the stock exchange website. A company
spokesman said he could not immediately give further details.
Naeem, which operates in Saudi Arabia, Egypt and the United Arab
Emirates, said in May it planned to reduce the proportion of its
revenue from Egypt to between 35 percent and 40 percent from 70
percent within two years. [Reuters, 10/27/2008]


AUTOMOTIVE INDUSTRY


20. (U) Zhongxing Auto to Export 5,000 Pick-ups to Libya: Hebei
Zhongxing Automobile Co., Ltd., an expert of pick-up trucks and
SUVs in North China, clinched an agreement with Libya on October
20, 2008 on exporting 5,000 pick-ups. The Hebei-based carmaker
exported 4,000 cars to the North African country in 2003 and
those products used by government organs and social
organizations won excellent public praise in the country for the
company, laying a strong foundation for the big order this time.
The order of 5,000 pick-ups accounts for 40%-50% of the market
demand for 10,000-12,000 such cars in Libya this year. The
company expects to sell 35,000 to 40,000 cars this year, with a
yearly increase of 15% to 20%. [tmcnet.com, 10/23/2008]


LABOR


21. (U) Libya to Recruit Large Number of Bangladeshi Laborers:
Libya signed a Memorandum of Understanding (MoU) with Bangladesh
to recruit a large number of workers as Tripoli launched a $130
billion infrastructure development program that will require
over one million foreign workers. The MoU was signed by the
Bangladesh Foreign Adviser, Iftekhar Ahmed Chowdhury and the
Libyan Labor Minister Maa'touq Mohammed Maa'touq. Under the
five-year development program, Libya will construct 300,000
housing units, 27 university complexes, over 10,000 kilometer
roads and maintain 24,000 kilometer roads. Presently, some
25,000 Bangladeshi are employed in Libya. The Libyan minister
did not give the exact number of Bangladeshi workers they will
recruit but said they issued 6,000 visas for Bangladeshi workers
last month. [thedailystar.com, 10/31/2008]


STEVENSC