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The Ministry of Energy was re-created three months ago. It existed five years ago, but then the power transferred to the National Oil Company, so it was dissolved at the time. Today, one could say that we are in a transition period, trying to adopt the new ways of doing business. We are trying to open up and we are preparing a new type of law for oil agreements. The Energy sector is divided into three parts: oil and gas, electricity, and renewable energy. We are trying to develop our institutions, reconstruct the Libyan Oil sector and trying to prepare the country for a new era, to address the needs of all three divisions. We highly encourage foreign investors to come into the country.
With regards to the transition period that the Energy Ministry is in, how would you describe the current level of interest, from the international community, in your efforts?
Seventy per cent of Libya's land is unspoilt territory, so there is a lot of potential and room for growth, especially in oil and gas. Our reserves currently stand at 36 billion barrels of oil. However, there are those who are conducting studies and analysis of our reserves and believe that in reality, it may stand at one hundred billion barrels. This tells us that there is a lot of potential, even the Americans think so. Most of the British and American oil companies that I have met with, have expressed interest in investing in the country. The main attraction is the low cost of production, having a cost average of three dollars per barrel. Therefore, they will have a high return on investment in a short period of time.
How would you asses the interest that is coming from potential UK investors?
The British and the Americans have an advantage in coming to Libya, the most important of which is that they know the country. These companies were here between the 1950's and 1980's and they understand the people. Tony Blair's visit to Libya was a very encouraging step for British investors, which probably gives them a political advantage as well. It might make things easier for them. However, I feel that investment is blind to nationality, they can be British, American or of any other background, it makes no difference.
Shell signed a deal on the day Tony Blair visited Libya, how was that seen here?
We are happy that Shell is here. It is good for them and for us. They have the technical capabilities to efficiently conduct oil and gas exploration.
How would you define the role of British companies in Libya? Are they active?
As I mentioned earlier, we are still in the transition phase and trying to adapt to the new ways of conducting business. We would like to prepare ourselves in such a way that will draw us out of the sanctions era. The country is now open to investors from across the world, and this happened quite rapidly, so we are not completely ready yet. The Libyan oil law is under construction; it will be paving the way to facilitate business endeavours for foreign investors. We are also preparing the EPSA IV agreement among others; to ease and simplify the procedure for those interested investors.
Could you expand on the incentives for UK investors who are thinking of coming to Libya?
Things will be simplified, they will receive a good share of our resources and we believe in complete transparency. We are giving them a chance to start doing business in our country again.
The government is not only trying to attract foreign investment but also trying to improve its production capacity, at the same time you still have a commitment towards a OPEC´s quota, how is that working?
Libya is currently producing oil in accordance with the old quota, which stands at around 1.3 million barrels a day. In the past, it was 3.3 million. We had to decrease our rate of production during the sanctions, thus the current low quota. We now have a capacity to produce between 1.7 to 1.8 million barrels a day. Oil companies that are coming in may be able to start by producing 2 million barrels a day and in the future, this will increase to 3 million barrels a day. We are going to negotiate with OPEC on the basis that we have a history of producing in large amounts and that we have ample reserve that stands at more than 100 billion barrels, which will allow us to negotiate changes in the quota.
What challenges are you facing to achieve these goals?
One of the challenges is surpassing the quota that is currently in place for oil production. The other challenge is to get the companies that are coming into Libya to explore fields other than oil production, but perhaps to explore our reserves and how to make best use of our oil.
Away from the oil sector, what can you tell us about electricity, gas and renewable energy?
There is petro-chemicals and refinery. One of the things that we are looking at is to export crude oil and other products. As it stands, we are refining around 230 barrels a day; we are going to increase this in the future, which entails that 50-60% of our production will be refined. We will also be concentrating on the Gas sector because gas is the fuel of the future and the consumption of gas is going to increase, especially for generating electricity and its usage in factories. In West Libya, we have a very big gas project, which will be exporting the resource to Italy and Tunisia. This is going to produce about 1 billion cubic feet a day. Eighty per cent of this will be exported to Italy and the remaining twenty percent will be for domestic consumption and for Tunisia.
Foreign investors are largely interested in the oil sector, but what about other sectors; do you feel there is a lot of interest in, for example, solar energy projects?
Solar energy is a new project. We believe that oil resources will not last forever but perhaps for 50 or 60 years. At this stage, we are conducting a pilot study. It is very hard for renewable energy to play a role in economic development; this is common knowledge. Therefore, we are learning more about it at this stage; we have the sun; we will take it from there. Then there is electricity. Our capacity stands at 4.700 Mw. We now have some projects in place in the hopes of increasing it to 10.000 Mw in ten years. There will be a lot of expansion taking place in Libya, like new factories. However we are also thinking of trying to export electricity because we are connected to the west through Tunisia, and to the east through Egypt.
What is your recommendation to those business readers who are contemplating to invest in Libya?
In oil and gas, we are in a transition period. We welcome anyone who is thinking of investing in the country. There is a lot of potential in Libya, especially in the oil, gas, and electricity sectors. If they have new ideas on how to export energy, they can come and invest in Libya. Libya has a new law for oil exploration; we have new agreements to simplify the procedure for investors. Libya is a country of business and pleasure, with a coastal line exceeding 1700kms. We have green mountains, the great Sahara, and a lot more to offer to all visitors or investors.
Energy is a lucrative sector. As the Minister of Energy, what message would you give to the readers of the Independent?
While we have oil, gas and energy, we also offer a fabulous landscape of an incredible variety. Starting up with more than two thousand kilometres of coast bathing in the Mediterranean sea, almost untouched Roman archaeological sites and magnificent seas of dunes spotted with beautiful oasis. Investors can do business here while they enjoy themselves at the same time.
Thank you for your comments.
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