VZCZCXRO2617
RR RUEHTRO
DE RUEHTRO #0293/01 0981425
ZNR UUUUU ZZH
R 081425Z APR 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 4699
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHEG/AMEMBASSY CAIRO 1449
RUEHTU/AMEMBASSY TUNIS 0802
RUEHAS/AMEMBASSY ALGIERS 0925
RUEHRB/AMEMBASSY RABAT 0865
RUEHTRO/AMEMBASSY TRIPOLI 5226

UNCLAS SECTION 01 OF 05 TRIPOLI 000293 
 
SIPDIS 
 
STATE FOR NEA/MAG, COMMERCE FOR NATE MASON, ENERGY FOR GINA 
ERIKSON, (NATHAN MASON), ADVOCACY CTR (REITZA), AND CLDP (TEJTEL 
AND MCMANUS) CAS FINANCIAL ATTACHE (SEVERENS) LONDON AND PARIS 
FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV EPET ENRG ETRD PGOV LY
SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR MARCH 2009 
 
ENERGY 
 
¶1. (U) Libya Oil Holdings Changes its Label Brand in Morocco: 
The Libyan state-owned oil group Libya Oil Holdings (LOH), which 
manages a network of 182 fuel distribution stations in Morocco, 
will now be called "Oilibya" in Morocco. LOH is an integrated 
oil company involved in the shipping, trading, refining, 
marketing and sale of crude oil and refined petroleum products 
in 21 countries in Africa. [africanmanager, 3/1/2009] 
 
¶2. (U) Tripoli Asks Oil Firms to Cut Production Share: Libya's 
state-owned National Oil Corporation (NOC) announced in its 
website that it will negotiate with four international oil 
companies, - Wintershall, ConocoPhillips, Amerada Hess and 
Marathon Oil - operating in the country to accept a lower share 
of oil production. The three American firms are NOC's 
international partners in the Oasis Waha Oil Company. 
Negotiations with Wintershall started in 2008, and Wintershall 
expects an amicable solution, which allows both sides to reach 
their aims in Libya as it was done in previous renegotiations 
signed with other international oil companies during 2008. 
[MEED, 3/4/2009] 
 
¶3. (U) Eni Opens Tender for Libyan Gas Project: Italian oil 
major Eni is to launch Libya's first water alternating gas (WAG) 
scheme as part of its program to increase reserves at the Bu 
Attifel field in the east Sirte basin. The enhanced oil recovery 
pilot project involves the alternate injection of water and gas 
to provide better production efficiency and reduce wastage from 
the injection process. Current production from the field is 
about 90,000 barrels a day. Eni is operator of the field as part 
of an equal joint venture with the state-owned National Oil 
Corporation. Eni says the scope of the project involves the 
conversion of existing deep wells to water alternating gas 
injectors along with a connection to an existing water injection 
network and new high pressure gas compressor station. [MEED, 
4/5/2009] 
 
¶4. (U) Joint Venture Firm to Manage Ras Lanuf: Libya's National 
Oil Corporation (NOC) has set up a joint venture company with 
the UAE-based Trusta group to develop the Ras Lanuf oil refinery 
in Libya. The new joint venture company, named Libyan-Emirates 
Refining Company (LIRCO), will upgrade the refinery, Libya's 
largest export facility, to produce output that is easier to 
market in Europe. The company was formed with $375 million 
dollars in combined assets; the two sides look to invest nearly 
$2 billion dollars in the joint project. The initial agreements 
were signed last year. The NOC had previously announced plans 
for 2009 to choose a partner to revamp and possibly expand the 
Azzawiya Oil Refining Company, its second-largest oil processing 
plant; where the partner would take a 50 percent stake in the 
plant, which processes 120,000 barrels of crude a day, in return 
for funding the upgrade. [Reuters, zawya.com, bloomberg.com 
3/10/2009] 
 
¶5. (U) NOC Chairman Says "Libya Plans to Buy All of Verenex 
Energy": Libya plans to buy all of Canada's Verenex Energy Inc, 
said the chairman of Libya's National Oil Company, Shukri 
Ghanem. Ghanem said Libya plans to buy all of the company, not 
just its assets in Libya, by exercising an option to pre-empt a 
friendly C$10-a-share bid by China National Petroleum 
Corp.(CNPC), offering the same price as the agreed by CNPC. With 
the assumption of debt, the CNPC offer is worth $406 million 
dollars. So far, there is no sign Libyan authorities have taken 
any of the steps buyers of listed companies usually take, such 
as hiring advisers or issuing a formal bid, suggesting the sale 
may not happen quickly. [Reuters Africa, 3/26/2009] 
 
¶6. (U) Gazprom Opens Tenders for Libyan Oil Blocks: Russian 
Gazprom Libya has invited contractors to prequalify for nine 
projects to support exploration activities in its two blocks in 
Libya. Gazprom won an exploration contract offshore in Libya's 
third licensing round in 2008 and won an exploration contract 
onshore in Libya's fourth licensing round. Gazprom Libya expects 
the basin-modeling work to run from May until November, while it 
expects the environmental work to start in January 2010. [MEED, 
3/28/2009] 
 
¶7. (U) Verenex to slow work in Libya's Ghadames in 2009: 
Canada's Verenex Energy is temporarily reducing the pace of its 
exploration program in Libya 40% from the original 2009 budget 
adopted in October 2008. Also, Verenex announced that its latest 
exploratory well drilled had strong gas shows and found 
 
TRIPOLI 00000293  002 OF 005 
 
 
extensive fracturing in the hot shale, which represents a 
potential oil and gas resource play. [Oil & Gas Journal, 
3/12/2009] 
 
¶8. (U) Libya to invest $10-$12 Billion in Oil Projects in 2009: 
Libya's National Oil Corporation (NOC) chairman, Shukri Ghanem, 
said that Libya will invest $10 billion to $12 billion in its 
oil industry in 2009, exceeding its total investment from last 
year. Ghanem also estimated that the oil market currently has a 
surplus of 1 million barrels a day of crude oil production. [Dow 
Jones, 3/14/2009] 
 
¶9. (U) Libyan Center for Remote Sensing Contributes to the 
Publication of First Digital Geo-Mineral Map of Arab Homeland: 
Arab Organization for Industrial Development and Mining has 
announced the publication of its first digital Geological and 
Mineral Map of the Arab Homeland. 
70 percent of the total map has been digitized. The map would 
help research, exploration activities and mining operations in 
Arab countries attracting investors in the mining sector through 
the definition of the mineral areas and promising areas for 
mining investment. [Jana, 3/15/2009] 
 
¶10. (U) Libya Gas, Oil Bidding Unlikely This Year: On the 
sidelines of the 2009 Offshore Mediterranean Conference, Ahmed 
al-Ghaber, a senior adviser to the management committee of 
Libya's National Oil Corporation (NOC), said Libya is unlikely 
to open an oil and gas bidding round this year, adding that the 
NOC is busy enough trying to consolidate recent project 
developments by companies working in the country. [Reuters 
Africa, 3/25/2009] 
 
¶11. (U) Shell Holds a Workshop on Oil Fields Development 
Techniques: As part of the agreement on technology transfer 
between Shell Libya and the National Oil Corporation (NOC), 
Shell held a workshop for NOC employees on the latest techniques 
used in the development of oil fields. Shell's team introduced 
the latest techniques used in the additional recovery, and 
technical and commercial ways in oil fields development. [NOC 
website, 3/26/2009] 
 
¶12. (U) Increase in Local Petroleum Prices: During the people's 
congress meeting, congress members refused GPC's latest decision 
related to the increase of local petroleum prices, including 
gasoline, starting March 1st. GPC will consider canceling the 
decision. [libyaninvestment.com, 2009-03-05] 
 
BANKING 
 
¶13. (U) Libya to Issue New Bank Notes: The Central Bank of Libya 
announced on Thursday that it will issue new bank notes in the 
form of 20 Dinar notes (1,300 Libyan Dinars = 1 U.S. dollar), 10 
Dinars, 5 Dinars and 1 Dinar on the occasion of the 32nd 
anniversary of the proclamation of people's power in Libya 
celebrated on 2 March every year. The new bank notes were put 
into circulation alongside the former notes of the same value on 
March 3rd. [afriquejet.com, 3/3/2009] 
 
¶14. (U) Increase in the Number of Bank Costumers: The number of 
customers who deal with banks in Libya during the years 
2007-2008 increased by 7%, up to two million four hundred 
thousand customers. Al-Jumhuriya Bank reported that Libya has 
seen an economic development increase by 24% during the past 
five years, adding that the increase in the Libyan market 
competition requires all banks operating in Libya to adopt a 
scientific method and the advanced platform to improve its 
performance through training of Libyan bankers and improvement 
of human resources. [Libyaonline.com, 3/252009] 
 
¶15. (U) First Conference of Libyan Bankers: The conference was 
organized by the Libya Central Bank under the theme "Together 
towards Promising Banking Sector". Topics discussed included: 
the financial strategies of the Libyan Central Bank for widening 
the banking reserve, the importance of renovating the banking 
role and of advancing internal auditing of banks working in 
Libya. [JANA, 3/21/2009] 
 
¶16. (U) Libya to Sell 25% of Jumhuriya Bank: The Governor of 
Libya's Central Bank announced Libya's intention to sell at 
least 15 percent of Al Jumhuriya Bank on the local stock market. 
Jumhuriya is Libya's biggest state-owned bank with a capital of 
more than 1 billion dinars after merging with al-Oumma Bank, the 
fifth-largest state-owned bank. Financial authorities will 
 
TRIPOLI 00000293  003 OF 005 
 
 
assess the impact of the first foreign banks in the country in 
more than three decades before continuing with more 
privatizations. [Tripoli Post, 3/25/2009] 
 
¶17. (U) Libya Aims to Grant Licenses for Foreign Lenders to 
Enter Libya Next Year: The Governor of Libya's Central Bank 
announced that Libya will grant the licenses either alone or in 
partnership with Libyan investors. "Now we are working on 
conditions and standards to grant licenses," he said. "We are 
working also on the number of licenses that might be granted to 
foreign banks." He said the aim would be to allow competition 
without harming Libya's banking sector. [Tripoli Post, 3/25/2009] 
 
REGIONAL ISSUES 
 
¶18. (U) Libya to Build 22-story, five-star Hotel in Mauritanian 
Capital: Libya will fund the construction of 30 million Euros 
hotel in Nouakchott. The hotel named "al-Fateh" will be built 
near the national army headquarters in Nouakchott. The 
construction process, scheduled to last for over 20 months, will 
create 450 jobs, while the hotel will create 300 jobs upon 
completion, including 90% of Mauritanians. The al-Fateh hotel 
will be built under the form of a date palm tree.  The highest 
building in Nouakchott so far does not exceed 10 stories. 
[Tripoli Post, 3/14/2009] 
 
¶19. (U) African Development Bank signs Loan Agreement with 
Egypt: The loan of $450 million dollars will be allocated for 
the implementation of the project of building thermal-steam 
generators near the port of Ain Sukhna, which lies 120 
kilometers east of Cairo. The aim of the project is to increase 
production capacity strengthening the infrastructure that would 
allow Egypt to meet the demand for electric power. The total 
cost for the project is estimated at 85.1 billion dollars. 
[afdb.org, 3/23/2009] 
 
¶20. (U) Libya Gives Eight Tractors to The Gambia: The provision 
of these tractors to The Gambia is part of the agreement between 
the two nations in contribution to the development of the 
agricultural sector in The Gambia. Libya also will provide 
twenty Vietnamese experts on agriculture for two years. 
[Allafrica, 3/25/2009] 
 
LABOR 
 
¶21. (U) Libya to Recruit Thousands of Bangladeshi Workers: Libya 
will recruit thousands of workers from Bangladesh as part of an 
infrastructure development plan worth more than $100 billion. 
The Libyan Embassy in Dhaka is issuing about 300 visas per day 
and that number will increase due to a huge demand for workers 
in Libya. Bangladesh is one of the world's poorest countries and 
depends heavily on remittances from expatriate workers, but host 
countries are facing problems with their own slowing economies. 
[Reuters, 3/23/2009] 
 
INVESTMENT 
 
¶22. (U) Libya's 2008 Balance of Payments Surplus at $44 Billion, 
Reserves at $136 Billion: The Central Bank of Libya announced 
that Libya had $44 billion balance of payments surplus in 2008. 
The Governor, Farhat Omar Bin Guidara, told the General People's 
Congress that Libya's foreign currency reserves were at $136 
billion at the end of 2008. Libya is among the few countries 
which are free of any foreign debt, which also helps it maintain 
a strong balance of payments. Guidara said Libya's medium term 
financial situation would not be a source of concern despite the 
global financial crisis, and anticipated a non-oil economy 
growing by 5-7 percent for 2009, with government spending the 
main engine of growth. Libya's cumulative oil revenues were $462 
billion for the 1970-2008 period, with average annual oil 
earnings at $11.8 billion, according to government data. The 
Libyan government spent $162.3 billion for the same period 
according to government figures released to the General People 
Congress. [Reuters, 3/6/2009] 
 
¶23. (U) India and Libya to Promote Investment: India and Libya 
entered into an agreement to promote investment by granting each 
other most favored nation treatment. The Bilateral Investment 
Promotion and Protection Agreement (BIPA) between India and 
Libya has been ratified in both sides. According to the 
agreement, both the countries will encourage and create 
favorable conditions for investors of each other to make 
investments in their region and to admit investments in 
 
TRIPOLI 00000293  004 OF 005 
 
 
accordance with their laws. [India News Online, 3/25/2009] 
 
¶24. (U) Libya Establishes 20 Billion Libyan Dinar Fund to 
Finance Medium and Small Businesses: The Tripoli Business 
Incubator program has been established to help Libyan graduates, 
unemployed and women to find suitable finance for their projects 
and provide them with general business assistance. Libyan 
authorities are to establish more business incubators in other 
cities. The Tripoli Business Incubator will be assisted in its 
early stages by the Jordanian Expertise House. [Tripoli Post, 
3/14/2009] 
 
¶25. (U) Standard & Poor's Agency Issues Credit Rating to Libya: 
Standard & Poor's (S&P), a U.S. ratings agency, has issued its 
first credit rating for Libya, assigning the country A- for its 
long-term prospects and an A-2 rating for the short-term. The 
rating is the first assigned to Libya since the country began to 
emerge from international isolation in 2003. The credit rating 
agency says the outlook for Libya is stable, noting that the 
country holds substantial assets and little debt. S&P notes its 
rating is constrained by "limited transparency of official 
decision-making in Libya", and remarks that private sector 
development remains at an early stage. [MEED, 3/18/2009] 
 
CONSTRUCTION 
 
¶26. (U) Marriott International to Open 370-Room Hotel in Tripoli 
in 2011: Marriott International announced that it would open a 
luxury JW Marriott Hotel in Tripoli by 2011. The 370-room JW 
Marriott Hotel Tripoli is owned by Daewoo Tripoli Investment and 
Development Co., a joint venture between Korean Daewoo 
Engineering and Construction and Libyan Oyia Co. and will be 
managed by Marriott under a long-term contract. The 36-story, 
innovatively-designed hotel will be located in Tripoli's new 
central business district. [Tripoli Post, 3/14/2009] 
 
¶27. (U) Korean Lotte Engineering & Construction Company Wins $76 
Billion Dollars Project in Libya: The project consists of the 
construction of facilities including roads, drainage system, 
water service, electricity and communications on a 415 hectares 
area of land located 100 kilometers west of Tripoli. The 
construction is expected to take 48 months until the completion. 
[Einnews, 3/12/2009] 
 
¶28. (U) Libyan Cement Company Undergoes Major Internal 
Upgrading: The Joint Libyan Cement Company Incorporated (JLCC), 
established as a Libyan company by the Economic and Social 
Development Fund (ESDF) and the Austrian Asamer Group in 2008, 
has undergone through major internal changes, restructuring the 
existing management, and is undertaking an investment program to 
repair, modernize and upgrade the cement plants in Benghazi, 
Hawari and El Fathaia in order to increase production of cement 
to meet the market demand in the long term. All these changes 
are planned to be fully completed by the end of 2009. [Tripoli 
Post, 3/25/2009] 
 
¶29. (U) Opening of Al-Wahat Hotel in Houn City: Houn, an oasis 
town 500 kilometers southeast of Tripoli, was the administrative 
capital of the Italian region of Fezzan and now is one of the 
new tourist landmarks in Libya. Al-Wahat hotel was built on an 
area of 40,000 square meters. [JANA, 3/25/2009] 
 
¶30. (U) Chinese Gezhouba Wins $400 Million Dollars Contract in 
Libya: Chinese Gezhouba Group Corp, one of the biggest 
engineering and construction enterprises in China, signed a 
construction contract worth $406 million dollars with the 
Housing and Infrastructure Board of Libya on March 25. According 
to the agreement, Gezhouba Group will offer services of survey, 
evaluation, planning, design and construction of an 
infrastructure project in southwestern Tripoli. The project is 
expected to take about four years. [China Knowledge, 3/30/2009] 
 
¶31. (U) Dubai's Drake & Scull to Set Up Libyan Unit: Dubai 
contractor Drake & Scull International is setting up a Libyan 
unit this year, its second venture in Africa, as it expands 
abroad and weathers a downturn at home.  The construction sector 
is suffering a sharp slowdown in the UAE, while Libya is 
undertaking a $126.5 billion five-year infrastructure 
redevelopment plan to modernize water and sanitation facilities 
and build airports, schools and houses. [Reuters, 3/31/2009] 
 
TRANSPORTATION 
 
 
TRIPOLI 00000293  005 OF 005 
 
 
¶32. (U) New Airbus Planes are Delivered to Afriqiyah Airways: 
Afriqiyah Airways will inaugurate new lines in July, September 
and November according to its development plan.  Starting in 
July, there will be two weekly flights to South Africa, Dubai 
and Manila; as from September, there will be three weekly 
flights to Congo Brazzaville and by November, two weekly flights 
between Tripoli and Beijing. [libyaninvestment.com, 3/5/2009] 
 
AUTOMOTIVE 
 
¶33. (U) Chinese Great Wall Motor Company to Export 3,300 Pickups 
to Libya: Chinese Great Wall Motor Company (GWM) won a Libyan 
government procurement order to supply 3,300 pickups for around 
$30 million dollars. The first batch of 1,000 pickups will 
arrive in the Benghazi Port at the end of March and the 
remaining 2,300 units will be delivered by June. The vehicles 
will service Libyan governmental departments including the 
departments of energy, electricity, medical care and sanitation, 
as well as traffic and transportation. GWM's technicians are 
already in Libya in order to develop after sales service. 
[Tripoli Post, 3/25/2009] 
 
 
INDUSTRIAL 
 
¶34. (U) Ace Hardware to Open Six Stores in Libya: Ace Hardware 
Corp., a retail cooperative, based in Oak Brook, Illinois, 
announced its plans to open six stores in Libya during the next 
10 years, beginning with two stores this year in Tripoli. Ace 
Hardware agreed to terms of a license agreement with Technology 
Corner, a consortium of Libyan business interests. The stores 
would be the first free-standing hardware outlets in Libya. Ace 
Hardware has 4,600 stores worldwide in more than 60 countries, 
including Kuwait, Saudi Arabia and United Arab Emirates. 
[Tripoli Post, 3/1/2009] 
CRETZ