Libyan oil once again attracts investors

Libyan oil once again attracts investors
Libyan oil once again attracts investors

Libya is betting more than ever on oil. After a decade of chaos, still divided between east and west where two governments are vying for power, the country aims to increase its production to eventually reach 2 million barrels per day. Foreign companies are once again rushing to invest in Libya, the “goose that lays the eggs of black gold”, since the country has the largest reserves in Africa.

TotalEnergies, Shell, ConocoPhillips, all these hydrocarbon multinationals have recently invested in Libya. There have been developments over the last three years. A reunified Central Bank, change in the management of NOC, the national oil company, and the resumption of different fields, such as that ofal-Charara, contested by the militias again recently. A more conducive environment for investments, according to Zakaria Al Barouni, general director of the Libyan insurance company Al Baraka: “ There are now a lot of operations from Chinese, Turkish and European companies. The government has assured these companies that they have stable financial institutions, he explainsTransfers of funds outside Libya are now possible and simple, it is more flexible for foreign companies to come and operate in Libya “.

Confidence regained

Political unrest following the “Arab Spring” of 2011 followed by the overthrow of the regime Muammar Gaddafi have reduced foreign direct investment in the country. Too much violence, repeated attacks on oil terminals; foreign companies had repatriated their employees.

Investor confidence seems to have been found. “ We cover war insurance, a first in Libya. We cover riots, civil unrest, construction, hazards and energy, details the insurer Zakaria Al Barouni, these types of insurance provide security, peace of mind for businesses in case bad events happen to their operations and infrastructure. Their money will not be spent in vain “.

Explosion of contraband

However, the NOC’s internal practices are considered even less robust today. Fuel smuggling is exploding. A worrying indicator for investments, believe many observers.

This fuel smuggling problem has existed for over 10 years, but its dollar size is only growing. This means that there are revenues which are dirty, which circulate in eastern Libya as well as in western Libya.summarizes Jalil Harchaoui, a Libya specialist at the Royal United Institute in London. Where does the money come from? ? We do not know. And since there are temptations for money laundering, you have to be wary. These American, French or Italian companies are begging for contracts whose nature we do not know, we do not know what they are in. launch “.

Some of the crude oil money is spent on fuel purchases abroad, mainly in Russia. Fuel which is then resold via the contraband market in neighboring countries such as Chad or Sudan. This would represent more than $5 billion per year, according to the Libyan audit office.

Read alsoLibya: Moscow interested in the country’s oil sector

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