VZCZCXRO9580
RR RUEHTRO
DE RUEHTRO #0221/01 0731438
ZNR UUUUU ZZH
R 141438Z MAR 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 4608
INFO RUEHCL/AMCONSUL CASABLANCA 0022
RUEHAR/AMEMBASSY ACCRA 0020
RUEHTO/AMEMBASSY MAPUTO 0001
RUEHNM/AMEMBASSY NIAMEY 0035
RUEHMV/AMEMBASSY MONROVIA 0013
RUEHTRO/AMEMBASSY TRIPOLI 5134
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHEG/AMEMBASSY CAIRO 1435
RUEHTU/AMEMBASSY TUNIS 0793
RUEHRB/AMEMBASSY RABAT 0857
RUEHAS/AMEMBASSY ALGIERS 0919
RUEHVT/AMEMBASSY VALLETTA 0389

UNCLAS SECTION 01 OF 05 TRIPOLI 000221 
 
SIPDIS 
 
STATE FOR NEA/MAG, 
COMMERCE FOR NATE MASON, 
ENERGY FOR GINA ERIKSON, 
STATE PASS USTR (BURKHEAD), AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (REITZA), AND 
CLDP (TEJTEL AND MCMANUS) 
CASABLANCA FOR FCS (ORTIZ) 
AMMAN FOR ESTH HUB (BHALLA) 
CAIRO FOR FINANCIAL ATTACHE (SEVERENS) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV EPET ENRG ETRD PGOV EFIN LY
SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR FEBRUARY 2009 
 
ENERGY 
 
¶1. (U) NOC Calls on Engineering Firms to Establish Libyan 
Presence: The Libyan National Oil Corporation (NOC) invited 
foreign petroleum engineering companies to a meeting February 25 
to discuss how they could establish a permanent local presence. 
 [en.noc.com.ly, 2/8/2009] 
 
¶2. (U) Total Accepts Lower Share of Libyan Oil Production: The 
Libyan National Oil Corporation (NOC) signed a Memorandum of 
Understanding (MoU) with the French oil company Total, 
continuing its policy of redefining old contracts under the new 
EPSA-IV framework. Total operates offshore the al-Jurf field and 
onshore the Mabruk field. Under the MoU, the NOC will get a 
higher share percentage of production and Total will pay a 
signature bonus of 500 million dollars to the NOC. Costs of 
exploration and development programs needed to increase 
production capacity will be shared equally by the NOC and Total. 
Total also committed to develop training programs for the local 
employees. Total's previous equity production in Libya averaged 
around 75,000 barrels of oil per day. The agreement was approved 
by the Supreme Oil and Gas Council on February 28 and still 
requires ratification by the General People's Congress (GPC). 
ENI, Petro-Canada, Repsol and Oxy signed MoUs under similar 
terms with the NOC in late 2007, and GPC ratification came in 
June-July 2008. [Bloomberg.com / Reuters, 2/11/2009] 
 
¶3. (U) Libyan-European Consortium Akakus Opens Tender for Murzuq 
Gas-Oil Plant: Akakus Oil Operations called interested firms to 
the prequalification for an engineering, procurement and 
construction contract on a new gas-oil separation plant. The 
100,000 barrel per day plant would be constructed at the 
consortium's IR field in the Libyan Murzuq basin, 700 kilometers 
from Tripoli. Akakus is owned by a consortium of Libya's NOC, 
Spain's Repsol, Austria's OMV, and France's Total. [MEED, 
2/4/2009] 
 
¶4. (U) Al-Jurf Oilfield Resumes Output after Accident:  France's 
Total announced that output has resumed at Libya's offshore 
al-Jurf oilfield, where 45,000 barrels a day of production were 
halted in April after a drilling accident. There will be a 
gradual resumption in production from the field. Al-Jurf is 
located 100 kilometers offshore western Libya at a depth of 90 
meters. The Libyan National Oil Corporation has a 50 percent 
stake, Total holds 37.5 percent and Germany's Wintershall AG 
owns 12.5 percent. [Bloomberg.com, 2/6/2009] 
 
¶5. (U) Norwegian firm Yara completes 50% Joint Venture with 
Libya: Norway's Yara International, the Libyan National Oil 
Corporation (NOC) and the Libyan Investment Authority (LIA) 
signed an agreement to create a new joint venture called "Libyan 
Norwegian Fertilizer Company" (Lifeco). Yara, NOC and LIA will 
have ownership shares in the new company of 50%, 25% and 25% 
respectively. NOC will transfer to Lifeco the existing Marsa El 
Brega fertilizer assets, valued at $225 million dollars, while 
Yara contributes to Lifeco the corresponding value in cash. NOC 
will supply natural gas to Lifeco under a long-term agreement. 
Yara will handle all urea and ammonia exports from Lifeco. 
Lifeco will embark on an optimization and upgrading program. The 
closing of the deal follows approval of the required licenses 
under the Libyan Investment Law. [tradingmarkets.com, 2/92009] 
 
¶6. (U) Japex to Begin Operations at Libyan Offshore Concession: 
Japan Exploration Company (Japex) will start drilling its first 
offshore exploration well in Libya by the end of February. A 
consortium, formed by Japanese companies Japex, Nippon Oil 
Exploration and Mitsubishi Corporation, acquired the offshore 
concession in Libya in 2005. The consortium holds an 8 percent 
stake and it is operated by Japex; the Libyan National Oil 
Corporation (NOC) holds the remaining 92 percent stake. Seismic 
 
TRIPOLI 00000221  002 OF 005 
 
 
2D and 3D surveys were conducted in 2007. [MEED, 2/12/2009] 
 
¶7. (U) Woodside Hits Oil and Gas in Libya's Ghadames Basin: 
Australia's Woodside found oil and gas in the Ghadames Basin. 
This is the fourth successful exploratory well drilled by 
Woodside in the area, which was awarded in May 2003. [Petroleum 
Africa, 2/17/2009] 
 
¶8. (U) New Discovery for Verenex: Canada's Verenex found oil and 
gas in the Ghadames basin.  This is the tenth oil discovery made 
by Verenex in the Ghadames basin. [Petroleum Africa, 2/17/2009] 
 
¶9. (U) Libya takes delivery of two oil tankers: Libya's 
state-owned General National Maritime Transport Company (GNMTC) 
has taken delivery of two oil tankers from Cido Shipping of 
Japan. Each of the tankers has a capacity of approximately 
830,000 barrels of oil. The two deliveries are part of a 
six-ship deal - with a total transport capacity of around 5 
million barrels - was signed by GNMTC last December to enable 
Libya to expand its oil shipping capacity to 11.8 million 
barrels. The recent purchases bring GNMTC's total fleet to 18 
tankers; of these, 13 are crude carriers, three are oil products 
carriers, and two are LPG carriers. [Oil & Gas Journal, 
2/16/2009] 
 
¶10. (U) CNPC Launches Bid for Verenex: China National Petroleum 
Corporation (CNPC) offered to buy Canada's Verenex Energy for 
$400 million dollars. CNPC's offer is subject to certain 
conditions, including the approval of the Libyan National Oil 
Corporation (NOC). The NOC had earlier approved a list of 
companies qualified to view the confidential technical data on 
assets in the Area 47 in the Ghadames Basin, northwest Libya, 
where Verenex has its most valuable asset - a 6.85% production 
share. The buyout will not include Verenex's partner in the 
Libya exploration plan, Indonesia's Medco Energy. [Verenex.com, 
2/27/2009] 
 
INVESTMENT 
 
¶11. (U) Libya's Interest in Buying ENI Shares: Italy's Foreign 
Minister Franco Frattini announced that the Libyan government's 
stake in oil and natural gas company ENI SpA has not yet 
exceeded 2%, despite Libya's earlier announcement that it 
intended to acquire a 10% interest in the Italian company. 
Libyan Investment Authority chairman told press that the extent 
to which the fund may increase its stake in ENI will depend on 
prices and circumstances. ENI is Italy's biggest energy company 
by market value and has the largest operations of an 
international oil company in Libya. [PetroleumAfrica.com, 
2/4/2009] 
 
¶12. (U) Libya's Income From Sovereign Fund $2.3 Billion Dollars: 
According to a report submitted to Libya's Basic People 
Congresses, Libya's sovereign wealth fund investments abroad 
total $50.58 billion dollars and have returned profits of $2.37 
billion dollars since the scheme started in 2006. $39.81 billion 
dollars were invested in short-term financial instruments 
abroad. The remaining 10.77 billion dollars were invested in 
long-term shares spread into stocks of 107 firms, 65 percent of 
which are located in North Africa, 20 percent in Asia, and 15 
percent in companies in Europe and North and South America. 
[Reuters, 2/18/2009] 
 
¶13. (U) More Foreign Companies in Libya: The number of foreign 
companies that opened branches and representative offices in 
Libya increased in 2009 to 817 and 80 respectively, according to 
the Ministry of Industry.  The Ministry also announced the 
privatization of 36 public companies and liquidation of other 59 
companies. [Libyaonline, 2/25/2009] 
 
 
TRIPOLI 00000221  003 OF 005 
 
 
¶14. (U) Libya to Fill Half of Unicredit Bank Capital Gap: 
Libya's Central Bank, with a 4.6 percent holding, will fill half 
of a 500 million euros gap in UniCredit's 3 billion euros 
capital raising measures. Shareholders Fondazione Cassa di 
Risparmio di Torino (CRT) and Carimonte Holding will also take 
up about 230 million euros of the shortfall. The CariVerona 
foundation, the top shareholder in UniCredit with just over 6 
percent, decided to abstain from the bank capital raising 
measure and left a 500 million euros shortfall in the capital 
raising measures. Overall, UniCredit is boosting its capital by 
6.6 billion euros to improve its ability to manage risk. Other 
smaller foundations will take up the remaining 20 million euros. 
Libya's Central Bank would hold about 7 percent in UniCredit 
after the capital increase and become the biggest single 
shareholder. CRT and Carimonte together would have 9 percent 
voting rights. [Reuters, 2/9/2009] 
 
REGIONAL ISSUES 
 
¶15. (U) Libya Provides Help to Boost Agriculture in Northern 
Ghana: The Ministry of Food and Agriculture in collaboration 
with the Libyan Government is providing free tractor services to 
farmers in the Northern Region to help boost agricultural 
production. The Libyan government provided 10 tractors and will 
bear the cost of fuel and maintenance of the tractors and the 
Ghanaian government is responsible for the selection of 
beneficiaries. [Tripoli Post, 2/5/2009] 
 
¶16. (U) Libyan Company to Invest $45 million dollars in Liberia: 
The Libyan Arab African Investment Trade Company (LAAICO) has 
finalized plans for a $45 million dollars investment in Liberia, 
of which $30 million dollars would go towards the reconstruction 
of the Ducor Palace Hotel, a five star hotel in Monrovia which 
was devastated during the civil conflict. The remaining $15 
million dollars will be for the establishment of a rubber 
processing plant in central Bong County in northern Liberia. 
LAAICO is also finalizing plans to construct a training center 
for the handicapped in the western Monrovia suburb of Virginia. 
[isria.com, 2/8/2009] 
 
¶17. (U) Libya Lends Tractors to Mozambique: Under the 
memorandum, ten tractors will be on loan for a renewable period 
of a year and will be used to implement the Mozambican's Food 
Production Action Plan for the period 2008/2011; the plan seeks 
to make Mozambique self-sufficient in rice production, to reduce 
significantly imports of wheat, and to increase surpluses of 
maize. [www.allAfrica.com, 2/11/2009] 
 
CONSTRUCTION 
 
¶19. (U) Mitchell Architects Wins Contract in Misurata: Libyan 
dairy producer company, Al-Naseem, awarded English Company 
Mitchell Architects a $9 million dollar contract for the 
building of a 6,500 square meter facility in Misurata, a city 
located 210 km east of Tripoli on the Mediterranean coast. 
[Libyan Investment, 2/06/2009] 
 
¶20. (U) Ace Hardware to Open in Libya: Oak Brook-based Ace 
Hardware Corporation announced that it has a deal to open six 
stores in Libya over the next decade. The retail cooperative has 
a license agreement with Technology Corner, a consortium of 
Libyan business people. The first two stores are scheduled to 
open this year in Tripoli. The stores would be the first 
free-standing hardware locations in Libya. Plans to open retail 
locations in Libya have been in the works since 2007. Ace 
Hardware has 4,600 stores throughout the U.S. and in 60 
countries, including Kuwait, Saudi Arabia and United Arab 
Emirates. [chicagobusiness.com, 2/24/2009] 
 
 IT 
 
TRIPOLI 00000221  004 OF 005 
 
 
 
¶21. (U) New WiMAX Service in Libya: Libya launched the country's 
first WiMAX data service. The new WiMAX network is meant to 
accommodate more than a quarter million users. It was built by 
three telecommunications equipment makers, France's Alcatel, 
China's ZTE and Huawei and the service will be managed by Libya 
Telecom and Technology Corporation (LTT), the country's primary 
Internet mobile services company. [North Africa Journal, 
2/16/2009] 
 
¶22. (U) Libya Invites Bids for Private Phone Licenses: Libya 
announced an international tender for the first private licenses 
for a combined fixed-line and mobile phone license. Interested 
parties are invited to make a bid before May 13, with the winner 
expected to be announced in June. The tender comes almost two 
years after Libya announced plans to privatize its mobile phone 
sector. Libya's General Post and Telecommunications Company is 
the monopoly supplier of fixed-line services while the mobile 
market is controlled by a duopoly of Libyana and al-Madar, both 
state-owned companies. Libya has 700,000 land lines for a 
population of more than six million people, and Libyana and 
al-Madar mobile operators have more than five million users. 
[AFP, 2/18/2009] 
 
BANKING 
 
¶23. (U) Arab Bank Wins Stake in Libya's Wahda Bank: Arab Bank 
has been selected as the strategic partner for the privatization 
of Wahda Bank, after financial offers were opened. Arab Bank 
submitted a price of $306 million dollars for a 19 per cent 
stake in the bank. The Arab Bank will now take management 
control of Wahda Bank and will be allowed to increase its stake 
to 51 percent in a three to five years period. Five banks were 
originally prequalified for the privatization, Intesa Sanpaolo, 
Arab Banking Corporation, Attijariwafa Bank, Societe Generale 
and Arab Bank. The privatization of Wahda Bank follows the 
sell-off of a 19 percent stake in Sahara Bank in September 2007. 
[MEED, 2/14/2009] 
 
¶24. (U) First Moroccan Bank Opens Representative Office in 
Tripoli: Attijariwafa bank Group opened its representative 
office in Tripoli to offer a new platform of exchange for the 
business community of both countries as well as for all North 
African and Sub-Saharan businessmen. Attijariwafa bank Group has 
operational presence in 22 countries. [Tripoli Post, 2/21/2009] 
 
PRESS 
 
¶25. (U) Foreign Press to Return to Libyan News-Stands: Libyan 
al-Ghad company, a private media business set up by Seif 
al-Islam, is going to distribute 90 Arab and international 
newspapers and magazines, including the main British, French and 
U.S. dailies. The Libyan government has long maintained a tight 
grip on both print and broadcast media. The state-controlled 
media carries no opinions inconsistent with official policy. For 
nine months between 2006 and 2007, Libyan authorities had 
allowed a small number of foreign titles to be sold. In 2007, 
al-Ghad launched two "independent" dailies and the country's 
first private television channel; the two newspapers have 
published criticism of senior officials. The authorities have 
since further loosened their control over the media, allowing 
AFP last November to open a bureau in Tripoli and have a 
permanent foreign correspondent accredited, the first for a 
global news agency. [AFP, 2/24/2009] 
 
FAIRS 
 
¶26. (U) Infrastructure Libya and Oil and Gas Libya Exhibition 
2009: More than 150 international specialized companies 
participated in the fair, including American companies. [Tripoli 
 
TRIPOLI 00000221  005 OF 005 
 
 
Post, 2/21/2009] 
CRETZ