By Hadi Fornaji.
Tripoli, 2 April 2013:
The National Oil Company has agreed to review its joint venture with its UAE partners in . . .[restrict]the Ras Lanouf refinery. The announcement today followed demonstrations outside NOC’s Tripoli headquarters, by refinery workers protesting foreign ownership.
The workers were also demanding a speeding up on investment in over-due upgrades for Libya’s largest refinery, which only resumed operations last September. This restart came after NOC reached a deal with Trasta Energy, its UAE partner in the Ras Lanouf joint venture, which is run as the Libyan Emirati Refining Co, (Lerco).
A range of disagreements had bedevilled NOC’s talks with Trasta, owned by the Abu Dhabi’s Al-Ghurair Group. Last June, on a UAE business mission to LIbya, Abdelaziz Al-Ghurair, the son of the conglomerate’s founder, announced that it was prepared to invest $1.2 billion upgrading the 1984 refinery, which has a design capacity of 220,000 b/d. However despite repeated announcements of a new re-start date, the facility remained shut down until six months ago.
Sources close to the talks last year indicated that the UAE side was resisting attempts by NOC to revise a 2006, 25-year fixed price supply contract, which even Qaddafi’s investigators concluded gave Lerco “unjustified discounts”.
Bloomberg reported today that the demonstrating refinery workers had demanded NOC reject “ a 20-month extension to the existing agreement with Lerco… ” .
However one analyst said this evening: “ The key issue is the costly upgrading and NOC has many calls on its funds. If Trasta can commit and get on with the work, which I understand is not yet fully scoped, and put in its funding in full, NOC’s attitude might soften, despite this rising public mood that foreigners ought to own nothing in the country”. [/restrict]