By Hui Shan Khoo | 18 November 2011

Several large UK-based companies are making plans to develop business in Libya when conditions stabilise. Britain is hoping that its key role in the Nato airstrikes against the regime of Muammar Gaddafi will help UK companies win business in the new Libya.

Alan Duncan, minister for international development, set up an ‘oil cell’ in Whitehall during the conflict to assess how the UK can tap into Libya’s huge energy resources.

But Guma El-Gamaty, the UK representative of the National Transitional Council (NTC), Libya’s interim government, dismissed any talk of Nato countries receiving preferential treatment. He said that there would be “no favouritism” and that the awarding of contracts would be “transparent, accountable and competitive”.

“I see Libya as a significant area of growth, but I do not know when: it will take time”
– Lord Bell, chairman of Chime Communications

AMEC, Arup and BP are among the UK-based companies that are hoping to develop business in Libya when conditions stabilise. But many others are waiting before publicly committing themselves to seeking Libyan contracts.

Infrastructure companies know that the country needs a lot of rebuilding work. One example is AMEC, an engineering company specialising in oil and gas, water, and transportation sectors. A spokesman for the company described North Africa as “a good market”, saying: “AMEC is looking at the possibilities of re-entering Libya and resuming our oil and gas operations. We are now in discussions with the authorities on the prospects.”

Arup, another global engineering company, is looking to forge strong relationships with the new Libyan government. A spokesman said: “Arup has long supported the people of Libya, getting involved in building universities and other major projects since the 1960’s. We want to help the Libyan people make the most of this historical opportunity to rebuild their nation.”

Libya, a member of OPEC, which represents 12 oil-exporting countries, holds the largest proven oil reserves in Africa and the 10th largest in the world. The petroleum sector was the main driver of the economy before the civil war and contributed to more than half of the country’s gross domestic product, according to the International Monetary Fund.

British oil giants are therefore also preparing their journey back to Libya. A BP spokesman said: “We have an exploration and drilling contract with the National Oil Corporation, but that was suspended in February because of the conflict. We currently have no ongoing production in Libya.

“We wish to restore our relationship with the NOC and with the new government. But we are waiting for an invitation or an acknowledgement that we still have a role to play in Libya.”

“We are keen to return to Libya and resume our contract. Libya has been an oil producer for many decades, and we would definitely like to continue to develop the country’s national resources.”

But BP faces competition from Eni, the oil company of Libya’s former colonial ruler, Italy. Eni resumed production in Libya in October.

Petrofac, a UK-based oil-services company that supplies around a quarter of British oil producers, is hoping to take advantage of the expected revival of Libya’s oil industry.

Although it has never had a presence in Libya, Petrofac has operations in Iraq, another war-torn country. The company’s chief financial officer, Keith Roberts, said that the company gained from “being in Iraq early and getting a foot on the ground.”

Trafigura, the Amsterdam-based metals and energy trading company convicted last year in the Netherlands of illegal waste dumping in the Ivory Coast and fined €1 million, met NOC officials earlier this month in the hope of winning oil contracts.

Iran and Qatar are also hoping to do business with Libya, and officials from their governments have already held several meetings with NTC counterparts.

Chime Communications, the public-relations group, is another UK business that is looking for business in Libya. Tim Bell, now Lord Bell, chairman of Chime Communications, said: “I see Libya as a significant area of growth, but I do not know when: it will take time. As countries rebuild, people will start to invest money.”

But specialists in the region are cautioning companies against “piling into” Libya.

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