Libya Seeks UK Firms to Develop Oil Sector and Construction Industry

An oil refinery in Zawiyah, Libya. The National Transitional Council is hoping to sign up British firms to develop the country's untapped oil reserves. (Photograph Giulio Petrocco/AP)

Libya Seeks UK Firms to Develop Oil Sector and Construction Industry

Nuri Berruien, head of Libya's National Oil Company, said the government would 'favour our friends' to develop its reserves

Libya began touting itself as the next Dubai to UK investors, as the country's government said it would reward its "friends" when it begins selling off lucrative oil contracts.

Representatives of the country's National Transitional Council called City executives to a central London hotel to drum up British interest in the "massive opportunities" on offer in Libya.

Oil companies, and their lawyers, have kept a close eye on Libya's vast reserves, which accounted for more than 95% of the country's exports before the popular uprising against former dictator Muammar Gaddafi.

Nuri Berruien, head of Libya's National Oil Company, said that the country's government would "favour our friends" when awarding new contracts to its 46bn barrels of untapped oil reserves - the largest in Africa and eighth largest in the world. But he said it was unlikely that any new contracts would be granted before an elected government takes over from the NTC.

The transitional government has said existing contracts with oil firms, including BP, Shell, Eni and Total, will be honoured unless it finds evidence of corruption in the awarding of the contracts under the former regime.

Berruien said Libya's daily oil production, which stands at 600,000 barrels, is expected to hit 800,000 by the end of the year and return to pre-war levels of 1.6m by the end of 2012. Virtually all of Libya's oil is exported.

Representatives of international oil groups were told the best way to exploit Libya's oil wealth is to go into partnership with a local operator. Under the country's laws foreign oil firms may own up to 65% in joint ventures with local operators.

Heritage Oil, the FTSE 250 oil exploration firm run by Tory donor and former mercenary Tony Buckingham, became the first new entrant into the Libyan oil market since the fall of Gaddaffi when it bought a 51% stake in Sahara Oil Services Holdings for $19m (PS11.9m) last month.

This week the Guardian revealed that Buckingham appeared to have sought the assistance of would-be Conservative MP Christian Sweeting in getting a foothold in the country.

Tarek Alwan, managing director of SOC Libya, a consultancy set up to help international businesses enter the Libyan market, said the north African country offered "vast opportunities" not just oil and gas, but also construction and tourism. He said Libya's sunny climate and location just 3.5 hours flying time from London could make it a tourist hot spot to rival Dubai. But he warned that "tough decisions" needed to be taken about what sort of country Libya wants to be before launching a tourism campaign.

"We can't really have a tourism industry of any scale without [allowing] alcohol," he said. "And do we really want tourists in bikinis and short dresses walking up and down our beaches?"

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