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Libya endeavors to encourage Gulf investments

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The Libyan Ministry of Oil and Gas announced the cabinet was currently looking to implement a plan that aims to encourage Gulf countries to make investments during its upcoming phase.

The plan being studied is focused on Gulf companies which have investments in Libya. It includes exempting the companies from taxes for five years which can be extended for another three years; on condition a Libyan partner is present.

The plan aims to encourage Gulf countries to investment in Libya, which is expected to witness developments as Gulf investors increasingly enter the Libyan market, following the collapse of Moammar Qaddafi’s regime.

The cabinet has granted the investor 65% from the project’s value while the other 35% percent goes either to the Libyan investor or the government.

Libyan Oil and Gas Minister Abdelbari al-Aarusi was quoted by the Riyadh newspaper as saying that Libya was willing to negotiate with the Saudi kingdom to allow Saudi company Aramco to directly invest in Libya to explore and extract petroleum.

Aarusi’s statements came during the minister’s visit to Saudi Arabia where he met with some businessmen in the Eastern Province’s Chamber of Commerce and Industry in the presence of head of the chamber, Abdelrahman al-Rashed.

The Libyan minister also told Saudi daily Al-Iktsadiya that the government has various large projects in petroleum, gas, petrochemicals, education and tourism, in addition to roads and residential buildings -- which value is estimated in billions and which U.S. and European companies stepped up for.

He added, however, that the Libyan government prefers Gulf companies, particularly Saudi Arabian ones, to be in charge of implementing these projects either in alliance with Libyan companies or the government.

Aarusi said that various large scale projects will be given Saudi companies in order to strengthen brotherly ties, remove previous disputes between the two countries, establish a new strategic partnership and benefit from the expertise of Saudi companies.

Aarusi also said that all obstacles facing Gulf investors will be overcome and it was safe to make investments in Libya, noting the influx of international companies to Libya.

According to him, petroleum companies working in Libya resumed their activities and restarted extraction after they halted the process due to a popular revolution that erupted on February 17, 2011.

He added all projects that have been currently suggested will be assigned to Gulf countries to implement while the others will be offered up to international organizations.

Aarusi also called on Libyan businessmen to visit the country and look into plans that require specialized companies, especially since there are global companies that have contracts with the Libyan cabinet.

The contracts are still in effect and they include infrastructure, hospitals, schools, roads and residential buildings’ projects, he added.

During his visit to the Aramco Company, Aarusi said he discussed several issues related to oil and gas as well as means to benefit from Aramco’s services, adding he expected Libyan delegations to visit Aramco in the future in order to sign agreements.

Aarusi also said he met with officials at King Fahed University for Petroleum and Minerals and discussed ways to cooperate.

A Saudi company, which the Libyan minister preferred not to reveal, submitted a plan to the Libyan cabinet to build two factories for sugar and cement in order to export the factories’ products to Europe and not Gulf countries.

He also said the total value of both factories is more than 1.7 billion riyals, adding the plan will be discussed in order to carry it out.

The minister added that the aforementioned company also submitted a request to establish a free zone and that the city of Misrata was chosen to be the location of both factories.

Last but not least Aarusi said he expected this Saudi company to be totally in charge of starting up the sugar and cement factories in mid-2013.