Libya - news item
23 Mar 2009
New local content requirements for 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
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
'We were told there will be no more offshore engineering under this new
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
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
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
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
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.
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