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Need to be quick on advantages. |
UAE companies are reportedly moving fast to establish themselves in Libya and earn a competitive advantage in a country where re-generation of the infrastructure and stabilisation of oil revenues are key priorities.
A 100-strong delegation of leading UAE companies and government officials used the inaugural flight of Etihad Airways to Tripoli as a reason to check out the new market.
The Emirate's visitors spoke of the need to move quickly to set up their businesses in Libya, despite the legal vacuum they would be moving into.
They are well-aware that the present Interim Government will draft some initial codes of conduct, which may then be replaced by the final elected government drafting new business laws. But they said the commercial reality is that they need to be on the ground as soon as possible.
Separately, the International Monetary Fund (IMF) has said that the resumption of gas and oil production in Libya is a prerequisite for recovery.
Libya produced 1.3 million barrels a day of crude earlier this month, up from a daily average of 1.1 million barrels in January, according to the state-run National Oil Corporation.
The holder of the largest oil reserves in Africa has the capacity to produce 1.7 million barrels, according to data compiled by Bloomberg. It also produced 2 billion cubic feet of natural gas.
Libya is restoring crude production after most output was stopped during fighting last year that led to the ouster of former leader Muammar Gaddafi.
Libya will return its crude production to pre-conflict levels in the third quarter and is seeking to raise output to two million barrels a day in three to five years, according to the Interim Government.
The country's five plants reportedly have processing capacities totalling 400,000 barrels a day.
As for the country's infrastructure, four decades of neglect have left their mark on Libya's capital, Tripoli. Roads are deeply pot-holed, while most buildings are shabby and show their 1970s architecture, while large piles of rubbish mount around them.
Many business executives on the delegation wanted a trade agreement between the UAE and Libya, so that the legal implications of doing business between the two countries would become easier.
But looking ahead, others spoke of their hopes that they would be allowed to set up companies in Libya without local partners.
The Dubai-based real estate and infrastructure firm, Al Ghurair Group, is apparently well ahead of its rivals. "We have invested in the largest refinery in Libya, where we have a 50% ownership," said a company spokesman. "We have come to expand our business, and plan to put in US$1.5 billion over four years."
Al Ghurair is also looking at contracting, banking and insurance in Libya.
The manager of a Dubai family group was clear that bidding for any big infrastructure project would still be six months away. Companies are looking at starting with commercial options first.
The well-ordered green fields around Tripoli are in stark contrast to the rambling chaos of the city. One Abu Dhabi-based businessman came to the conclusion that he would start by looking at how to support the obviously successful small holders, producing fruit and vegetables.
One sector has already done very well this season. Unusually heavy rains in October and November have resulted in a bumper crop of the local truffles, leading to a glut in the market.
Dr Yousef Al Wahaishi, the Minister of Transport in the Interim Government, said that part of this regional strategy was that Tripoli airport is being rebuilt with a focus on a hub airport, carrying passengers and goods through Libya, rather than as a destination in its own right.
from Ali Fakha, Dubai Office
(Image courtesy of ©iStockphoto.com/leminuit)
