R 040958Z AUG 08
FM AMEMBASSY TRIPOLI
TO SECSTATE WASHDC 3757
INFO DEPT OF COMMERCE WASHINGTON DC
DEPT OF ENERGY WASHINGTON DC
AMEMBASSY RABAT 
AMEMBASSY ALGIERS 
AMEMBASSY TUNIS 
AMEMBASSY CAIRO 
AMEMBASSY VALLETTA 
AMEMBASSY ROME 
AMEMBASSY PARIS 
AMEMBASSY LONDON 
AMEMBASSY TRIPOLI

UNCLAS TRIPOLI 000632 
 
 
DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON 
ENERGY FOR GINA ERICKSON 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV EMIN ENRG EPET ETRD LY
SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR JULY 2008 
 
AVIATION 
 
¶1. Flight Safety Foundation Workshop in Libya: The Flight Safety 
Foundation's CAAG (Controlled Flight Into Terrain and Approach 
and Landing Accident Reduction Action Group) brought its 
internationally regarded Approach and Landing Accident Reduction 
(ALAR) Tool Kit workshop to Tripoli, Libya last week.  Libyan 
aviation professionals said that this was the first time a 
non-governmental international aviation safety event has been 
held in Libya. The workshop was hosted by Afriqiyah Airways of 
Libya and organized by Capt. Samir Abussada, a Libyan commercial 
pilot.  More than 50 aviation professionals from Chad, Egypt, 
Libya and Tunisia attended the workshop. They represented civil 
aviation authorities, air traffic management organizations and 
several airlines in the region. [Flight Safety Foundation, 
7/21/08] 
 
CONSTRUCTION 
 
¶2. Seokwang Gets Contract:  South Korean builder Seokwang 
Construction Co Ltd has announced that it has won a 493 billion 
won ($475.5 million) order to build houses in Libya.  Seokwang 
said in a filing to the Korea Exchange that it had secured the 
deal from SMI-Hyundai Corporation Ltd., which has a 
well-established presence in Libya. [Reuters, 7/3/08] 
 
¶3. Impregilo finalizes Libya contract to build university 
centers:  Impregilo SpA said it has finalized contracts to build 
three university centers in Libya after the Libyan government 
approved construction plans. Impregilo said that the 'initial' 
authorization covered three buildings for a total of 
approximately 400 million euros.  Impregilo said work will start 
on the three centers in the next few months and is expected to 
be completed by 2011.  The contracts were signed by Impregilo 
Lidco, which is 60 percent owned by Impregilo and 40 percent by 
Libyan Development Company and the ODAC (Organization for 
Development of the Administrative Centers). [Thomson Financial, 
7/7/08] 
 
¶4. Spain's Sacyr Signs Libya Deal:  Spanish construction firm 
Sacyr Vallehermoso has announced that it has signed three 
building deals in Libya worth 600 million euros through its 
subsidiary Svlidco. The contracts involve the construction of 
public service networks to provide gas, drinking water, 
telephone services and road construction in the cities of 
Bengazhi and El Beyda.  Svlidco, which is 60 percent owned by 
Sacyr and 40 percent owned by the Libyan government, hopes to 
sign the final contracts within six to eight months, according 
to a company statement. [Reuters, 7/14/08] 
 
¶5. Hill International Signs Contract:  U.S. firm Hill 
International announced today that it has received a contract 
from the Libyan Organization for the Development of 
Administrative Centers (ODAC) to provide pre-construction and 
design management services on behalf of the Libyan Ministry for 
Higher Education in connection with 27 new university campuses 
across Libya. The one-year contract has an estimated value to 
Hill of approximately $11.5 million.  The overall $5 billion 
university construction program is expected to be completed by 
December 2011. The campuses will range in size and diversity, 
accommodating 2,500 to 13,500 students in various regions 
throughout the country. [Businesswire, 7/15/08] 
 
¶6. Movenpick to Open Resort in Libya:  Movenpick Hotels & 
Resorts has signed a management contract with Libya's Bank of 
Commerce & Development for an urban resort hotel with over 500 
units to open in Tripoli in 2010.  Movenpick Hotel Diar Assalam 
will be situated in the most upmarket residential district of 
Tripoli as part of a multipurpose development whose planned 
features include a commercial center and a yacht club.  To be 
located directly on the waterfront, the upscale resort will 
offer 320 rooms and suites, nine villas as well as 213 serviced 
apartments. Among these are several restaurants, a conference 
hall accommodating 400 delegates as well as a spa complex. 
[Libyainvestment.com, 7/18/08] 
 
¶7. Libya to Expand Cement Production: Libya's government is 
planning to expand cement production to 15 million tons by 2011 
from 8 million, a government official has told Reuters.  The 
Tripoli government awarded licenses to four foreign companies -- 
out of 24 applicants -- earlier this month to set up 
cement-related operations to exploit natural resources including 
iron ore, lime and clay, according to Khalifa Ahmed al Badr, 
head of the state-owned National Mining Corporation.  Badr did 
not name the four foreign firms which won the licenses to 
operate in Libya but said these companies have to form 
partnerships with Libyan firms whether state-owned or private 
ones. "The National Mining Corporation fixed the minimum share 
of the Libyan side in the partnership operation at 50 percent," 
said Badr, adding the bid winners have also to pay 25,000 dinars 
($21,150) as upfront payments.  [Reuters, 7/22/08] 
 
REGIONAL ISSUES 
 
¶8. Energy projects with Egypt:  Libya is planning an oil 
refinery and a natural gas pipeline in Egypt, helping boost 
investment in its Arab neighbor to $10 billion in the next two 
years, its prime minister has said.  "We have now about $2 
billion (of investments) and we expect that within a period of 
two years maximum this will reach $10 billion," al-Baghdadi Ali 
al-Mahmoudi told a news conference.  "It was agreed that an oil 
refinery will be built west of Alexandria with Libyan funding 
and it will be used for Libyan crude," he added.  The refinery 
would have a capacity of 250,000 barrels per day, Mahmoudi said, 
without giving further details.  Plans also included a natural 
gas pipeline between the Egyptian coastal city of Alexandria and 
the Libyan city of Tobruk, Mahmoudi said.  He did not say if the 
pipeline would carry Egyptian natural gas or Libyan natural gas 
or say when it would begin operating.  Other investments could 
include agriculture, real estate, and further energy projects, 
Mahmoudi said. [Reuters, 7/3/08] 
 
¶9. Portugal and Libya ink accords:  OPEC-member Libya and 
Portugal have signed two accords to boost cooperation in the oil 
and gas industry and allow the north African country to carry 
out investments inside and outside Portugal, Libya's official 
news agency Jana said.  The two countries signed a framework 
agreement and a memorandum of understanding on Saturday in 
Tripoli during a visit by Portuguese Prime Minister Jose 
Socrates.  The framework agreement seeks to encourage 
cooperation in oil and natural gas, especially in the areas of 
exploration, drilling, distribution, refinery and oil supply. 
The agreement also aims to boost bilateral trade and invited 
Portuguese companies to carry out projects in Libya in sectors 
such as housing, renewable energy, water purification, 
sanitation and tourism.  The memorandum of understanding 
stipulates that the Libyan Investment Corporation (LIC) explore 
the possibilities of investment on its own, or in partnership 
with the Portuguese Ministry of Economy, in tourist, real estate 
and petrochemical projects both inside and outside Portugal, 
Jana said.  [Reuters, 7/20/08] 
 
 
OIL & GAS 
 
¶10. Gazprom in Libya talks:  Gazprom, Russia's state-controlled 
energy company, has offered to buy all oil and gas available for 
export from Libya, threatening to grab greater control of 
Europe's energy supplies.  Chief Executive Officer Alexei Miller 
made the proposal to Libyan leader Moammar Qadhafi during a 
visit to Tripoli on July 9, the Moscow-based company said in a 
statement. Libya exported about 1.53 million barrels of oil a 
day in 2006, almost enough to supply Italy.  Gazprom considers 
the country its priority partner in North Africa and said it has 
registered a unit called Gazprom Libya in Tripoli. Less than a 
month ago the company opened its first African office in 
neighboring Algeria.  [Bloomberg, 7/10/08] 
 
¶11. Libya to Cut Oil Production Because of Pipeline Work: 
Libya will cut output by 5.7 percent because of pipeline 
maintenance, trimming supplies at a time of near-record prices. 
The repairs will shut down 100,000 barrels a day of production 
this week, Shokri Ghanem, the country's top oil official, said 
in telephone interview. Libya has already idled Total SA's 
75,000 barrel-a-day al-Jurf field after a drilling accident in 
May. [Bloomberg, 7/15/08] 
 
¶12. Star Consortium concludes $2 billion Libya deal:  The Star 
Consortium, comprised of UAE-based Al Ghurair Investments' 
subsidiary TransAsia Gas International and ETA Ascon Star 
Group's Star Petro Energy, has concluded a $2 billion deal with 
the National Oil Company of Libya to set up a joint venture 
company to own and upgrade its Ras Lanuf refinery. The proposed 
Joint Venture Company will be incorporated and registered in one 
of the free zones in Dubai, with offices in Ras Lanuf, Tripoli 
and Dubai.  [Libyainvestment.com, 7/15/08] 
 
¶13. Houston-based NATCO Awarded Contract:  NATCO has announced 
that it has been awarded a $24.9 million contract to provide 
membrane separation technology and equipment to capture CO2 for 
re-injection in Bouri, Libya's largest offshore oil field. Eni 
Oil Limited Libyan Branch operates the Bouri production 
platforms in the Mediterranean Sea, one of which will house the 
pre-treatment equipment and membrane systems intended to treat 
more than 160MM SCFD gas.  [Reuters, 7/16/08] 
 
¶14. Yara Deal with NOC:  Libya's National Oil Corporation (NOC) 
and Yara International ASA of Norway, have completed a joint 
venture for the production and marketing of mineral fertilizer. 
This partnership agreement was signed on July 17 by Dr Shokri M. 
Ghanem for and on behalf of the NOC, Mr Mustafa Zarti on behalf 
of the Libyan Investment Authority, and Dr. Thorleif Enger, 
President and CEO of Yara International ASA.  The planned Joint 
Venture will be owned 50% by YARA and 50% by the Libyan party 
(National Oil Corporation and Libyan Investment Authority) which 
includes the ammonia and urea plants located at Marsa el Brega 
in Libya, presently owned by the NOC. It is planned that the 
newly formed joint venture will commence the operation of the 
plants during the month of September 2008.  This partnership 
agreement covers upgrading the existing production capacity at 
Marsa el Brega in Libya, and to study the feasibility of adding 
new fertilizer plants.  [NOC website, 7/18/08] 
 
¶15. Enppi, Petrojet Win $1.4 Billion Gas-Pipeline Contract in 
Libya:  Petroleum Projects & Technical Consultations Co. 
(Petrojet) and Engineering for the Petroleum and Process 
Industries (Enppi) have reportedly won a $1.4 billion contract 
to expand Libya's natural-gas distribution network.  The two 
Egyptian state-run companies will extend Libya's gas pipeline 
network by 1,000 kilometers (620 miles), the Egyptian Oil 
Ministry said today in a statement on its Web site. The contract 
is part of a Libyan project to link 500,000 homes to the gas 
network in five years, it said.  Egypt and Libya also plan to 
link their electricity grids to facilitate power trading during 
periods of peak consumption, according to the statement. 
[Bloomberg, 7/18/08] 
 
¶16. Libya wins better terms for oil field contracts:  Four of 
Europe's biggest energy groups have rewritten two large oilfield 
contracts with Libya, agreeing to significantly reduced terms 
for the right to keep working there.  Total of France, 
StatoilHydro of Norway, Spain's Repsol and Austria's OMV agreed 
to pay a $1 billion signing bonus for the contracts, which 
extend their stakes in the projects for another 10-15 years to 
¶2032.  The onshore fields, which lie 700km south of Tripoli, 
produce 300,000 barrels a day, with output expected to rise to 
380,000 b/d in 2012.  The two contracts cover block NC115, in 
which Total and OMV have 30 per cent stakes and Repsol the 
remaining 40 per cent. In the other block, Total and OMV each 
hold a 24 per cent stake, Repsol has 32 per cent stake and 
StatoilHydro holds the remaining 20 percent. [Reuters, 7/18/08] 
 
¶17. Distance Learning Agreement signed between NOC and IHRDC: 
On Thursday 27th July 2008, the Libyan NOC signed a distance 
learning agreement with Houston-based International Human 
Resources Development Corporation (IHRDC) which is organized and 
authorized by British Petroleum (BP).  Under this Agreement, 
IHRDC will install a distance learning system, which will allow 
300 users access at the same time through NOC's main domain. 
150 licenses are to be given to national companies, as well as 
NOC's affiliates, in order to expand the user's base of the 
distance learning process.  IHRDC will provide training and 
workshops on the application of such system.  [NOC website, 
7/29/08] 
 
¶18. Verenex Makes Find:  Verenex Energy, Inc., the Canadian 
explorer that operates in North Africa and France, has made its 
seventh oil find in Libya's western region of Ghadames.  The 
exploration well, called 4/47-1A, tested at flow-rates between 
1,399 and 1,535 barrels a day, according to Libya's state-run 
NOC in a statement on its website.  Under a 30-year 
production-sharing agreement signed in 2005 by Verenex, 
Indonesia's PT Medco Energi International and Libya, the two 
foreign companies will take 13.7 percent of any output and the 
North African state 86.3 percent. Verenex is the operator of the 
concession.  Medco said in February that all six wells drilled 
in area 47 had found oil, and that the concession held potential 
reserves of 1 billion barrels with a potential daily output of 
75,000 barrels a day.  [Bloomberg, 7/28/08] 
 
¶19. Libyan Oil Shipments Resume with Switzerland:  According to 
Head of the Swiss Oil Association Rolf Hartl,  Tripoli has 
resumed oil supplies to Switzerland with its own ships, 
reversing a July 24 decision to halt shipments.  A Libyan tanker 
arrived in Genoa with 80,000 tones of crude oil which will be 
transferred to the Swiss refinery of Collombey through an oil 
pipeline. Two Swiss citizens detained in Libya immediately after 
the arrest of Hannibal al-Qadhafi have been released, though 
they are not allowed to leave the country. The two work for a 
Swiss company in Libya, and were officially arrested for 
violation of immigration regulations.  After 10 days in prison, 
they are now in the Swiss embassy in Tripoli, waiting for 
authorization to leave.  [AGI, 7/30/08] 
 
¶20. Boots & Coots signs hydraulic workover and prevention 
contract in Libya:  Boots & Coots International Well Control of 
Houston, Texas has announced it has signed a multi-service 
contract with Libya's Harouge Oil Operations Company. The new 
contract, valued at close to US$15 million for a two year 
period, with optional one year extensions, provides for one 
hydraulic workover unit and a Safeguard prevention well control 
specialist for Harouge's Amal field.  The hydraulic workover and 
prevention services provided under the contract give Harouge 
in-house first responder capabilities and will help the oil 
company achieve its field maintenance and production objectives. 
 Boots & Coots currently performs services under hydraulic 
workover/snubbing and/or Safeguard contracts in the North 
African neighboring countries, Algeria and Egypt, as well as in 
West Africa, the Middle-East, Venezuela, India, Oman and 
domestically in the US.  [Boots & Coots website, 7/31/08] 
 
 
STEVENS