Libya

More than 30 international companies attended a meeting by the National Oil Corporation (NOC) at the end of February to discuss requirements that they should establish Libyan operations to qualify for oil and gas engineering contracts (see Libya Focus, February 2009, 10).

The specialist publisher and newswire MEED reported that, following the meeting, companies were calling for 'crisis talks' over the proposed ban on offshore engineering. The Tripoli-based business development director of one company said, 'We were told there will be no more offshore engineering under this new directive, which is potentially disastrous for an international company like ours. Unless we shift our entire engineering staff over from Europe, I do not see how this system will work.'

Libyan officials appear determined to press ahead with this latest step in the policy of “Libyanisation” of the economy. Similar requirements were imposed on oil service companies and those supplying equipment to the sector following the closure of the London and Dusseldorf based international procurement companies Umm al-Jawaby and Medoil in late 2007. Regulations were introduced that give preference to local suppliers.

The owner of one foreign-owned independent service company based in Tripoli told Libya Focus that in the face of so much Libyan legislation he had recently lost hope the regulation might be abandoned or amended. He said he had started to break his business into separate divisions in order to find a suitable local join venture partner for each segment.

Until now, international companies providing engineering services to the oil sector were not included in the legislation. An executive from one company told Libya Focus in mid-2008 that although it described its business as the delivery of services, it was in fact operating as a 'body shop' bringing in qualified engineers from abroad to work in Libyan oil fields.

It is this practice that the new proposal from the NOC will outlaw.

The head of the NOC committee responsible for establishing a local engineering presence, Saleh Rahuma, told MEED that the proposal would not be watered down. 'We are working on pulling together our vision for the whole project, which will require much more of a commitment to training and retaining Libyans over the duration of a project rather than just at the start,' he said.

For more information on Libya Focus contact info@menas.co.uk