Libyan Prime Minister Abdurrahim el- Keib appealed to U.S. companies such as Exxon Mobil Corp. (XOM) and Microsoft Corp. (MSFT) to invest in his oil-rich country, saying Italian and French companies are already moving quickly to take advantage of opportunities in energy and infrastructure.
“The new Libya is open for business,” he said yesterday in an interview during a visit to Washington, repeating a phrase Libyan diplomats have adopted for promoting opportunities in the North African nation.
El-Keib said Libya has restored oil output to 75 percent of pre-war levels, producing as much as 1.2 million barrels a day currently, compared with 1.6 million barrels a day early last year. Libya was wracked by a bloody, eight-month rebellion last year that interrupted oil production and ousted longtime dictator Muammar Qaddafi.
El-Keib also made his case for investment directly to 190 executives from 100 U.S. companies including Exxon Mobil, Microsoft, General Electric Co., Boeing Co. (BA) and Motorola Solutions Inc. (MSI) in a closed-door session yesterday. He assured members of the U.S.-Libya Business Association that his nation’s security situation is stable and shouldn’t be considered a hindrance to foreign investment and trade.
“Italians, especially Eni, are coming back first. They had the courage to do it,” el-Keib said in the interview, referring to the Italian oil company Eni SpA. (ENI) “I hope U.S. companies would come. Even the U.S. oil companies haven’t started coming back.”
Play a Role
Eni has been working in the former Italian colony since 1959 and generated 13 percent of its revenue there before the Libyan conflict last year. Before the uprising began in February 2011, Eni’s Libyan oil and natural gas volumes were estimated at 280,000 barrels a day. Total SA (FP) of France, the first country to recognize the anti-Qaddafi opposition last year, produced 55,000 barrels a day before the uprising.
El-Keib said American companies that weren’t in Libya during the rebellion now have an opportunity “to show the Libyan people they care” and that they want to play a role in reviving the nation’s economy.
Richard Vierbuchen, director of Exxon Mobil International Ltd., was one of the executives who met with el-Keib and said his company was eager to help with restoring Libya’s wealth.
“It’s a new era in the oil and gas business in Libya, and they should begin that era by establishing the systems and processes that they need to make sure the people of Libya are getting the greatest possible value from their nation’s resources,” Vierbuchen said in an interview. “We’re simply offering to help with that process.”
Exxon Mobil is the world’s largest energy company by market value. Under chairman and chief executive officer Rex Tillerson, the Irving, Texas-based company is spending $37 billion this year to build gas-export plants, expand chemical plants and search for oil from Madagascar to Canada.
Vierbuchen said Exxon Mobil has exploration assets in Libya, not production assets, and that the company’s ability to get back to business will depend on the security environment and the Libyan government’s plans.
Libyan crude output rose 200,000 barrels to 1.125 million last month, the highest level since February 2011, according to a Bloomberg News survey. Libyan production had tumbled to 45,000 barrels a day in August from 1.585 million in January 2011, the last month before the uprising began.
Nuri Berruien, the chairman of Libya’s state-run National Oil Corp., said in an interview Feb. 27 that the country was pumping 1.4 million barrels a day of crude and is on track to exceed what it produced before last year’s revolt.
Resuming Oil Production
Occidental Petroleum Corp. (OXY) was the first American company to resume oil operations in Libya after U.S. sanctions were lifted in 2004. In early 2011, Los Angeles-based Occidental suspended production due to the armed conflict and a new round of sanctions. Production operations have resumed, Chief Executive Officer Stephen Chazen told an energy conference last month, according to the company’s website.
Efforts to do business in Libya have been hampered by U.S. and British investigations into possible bribery payments to officials of the Libyan Investment Authority, the country’s sovereign wealth fund, during the Qaddafi years. Officials with the new Libyan government had asked U.S. officials to continue holding the fund’s U.S. assets until a new leadership could be put in place at the investment authority, the prime minister said.
Cutting Out Corruption
The transitional Libyan government appointed a committee to review existing contracts with international corporations to ensure that corruption is eliminated, el-Keib said in the interview.
Graft in the Qaddafi era was “so bad you would not believe it,” he said, adding that some contracts were found to include kickbacks of 20 percent to 30 percent demanded by officials. He said where existing contracts are fair, they will be maintained.
The prime minister said that Libya is working to restore its security, rebuild its physical infrastructure, improve its human capital, and create “a business-friendly environment.”
On March 6, political and tribal leaders in the country’s oil-rich east declared a semi-autonomous region. El-Keib said demands for greater autonomy must be addressed within the framework of the Libyan constitution and the law. He said he understood the frustration of many Libyans who chafed under what he called extreme centralization under Qaddafi’s rule.
“We are working very hard to decentralize,” establishing government offices throughout the country, he said.
The prime minister also pushed back at the notion that regional anti-Qaddafi militias jeopardize stability. Calling the groups “freedom fighters,” he said the vast majority “are OK” and are in talks with the government about integrating themselves into the national and local security forces.
“We try to tell them that if they join government institutions, that’s the way to keep the revolution safe,” he said. He said the government has also offered the former rebels scholarships, training and loans in an effort to integrate them into society.
El-Keib said the government is focusing on rebuilding infrastructure such as damaged roads, boosting education and health care, and developing a technology “e-government” initiative. He said the government had proposed a $68 billion budget for this year that awaits approval by the National Transitional Council.
Stock Exchange Reopening
The prime minister said $100 billion in Qaddafi-government assets around the world have been unfrozen and made available to the new administration.
Asked about plans to reopen the Tripoli stock exchange on March 15, he said “it’ll take time” before investors from Gulf states and the West are ready to “trust the situation. People have the right to wait and see.”
El-Keib met with President Barack Obama, Secretary of State Hillary Clinton and Congressional leaders, and today plans to visit other U.S. agencies as well as the World Bank and the International Monetary Fund. The prime minister said he will appeal to the IMF and World Bank for help in recovering more international assets ferreted away by members of the old regime and in setting up a new banking system.
To contact the reporter on this story: Indira A.R. Lakshmanan in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: John Walcott at email@example.com