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by Andrew White and Alex Delmar-Morgan on Sunday, 05 October 2008
zoomThe Ras Lanuf refinery is undergoing a $2bn upgrade, with the help of the UAE’s Star Petro Energy.
As an OPEC member, Libya's oil revenues generate over 50 percent of its total GDP and almost 95 percent of its total export earnings.
The official development assistance figures for Libya stand at $20.8m, of which only 0.6 percent comes from the US, while its overall debt has been recorded at $4.6bn, against its oil-related exports of $29.4bn.
The Ras Lanuf refinery became operational in 1984 and produces an estimated 220,000 barrels of oil a day, producing a total of 10 million tonnes of refined petroleum products a year for export to the US and Europe.
A lot of very basic projects have been held up for years, decades even, because of problems getting funding approved.
The $2bn upgrade is expected to take around five years to complete, and will involve revamping and refurbishment of the existing plant.
Following the Ras Lanuf deal, ETA Ascon Star Group - the parent company of Star Petro Energy - and its consortium partners Al Ghurair Investments are also pursing other deals in Libya's oilfield services, steel and cement industries.
"If you take the case of Ras Lanuf, the number of people who will be coming to work there will be substantially higher than it is now, so we need to increase the size of the township, as well as improve the roads and other facilities there," explains Mahdevan.
"We're also looking seriously at some medical centres and other infrastructural facilities, including building some hotels," he adds. "We want to ensure that the township is a pretty good place to live - and for that we need to have more houses and more facilities."
As the development of projects such as Ras Lanuf demand improved infrastructure and facilities, so the Gulf's real estate sector has been quick to notice Libya's economic resurgence - and lay the foundations for construction work across the country.
Dubai-based Nobles Properties is one such developer, and has signed a deal to build a $500m mega-project spread over 275,000 sq ft on the waterfront in the heart of Tripoli.
"We see great potential in the Libyan market and its outstanding level of economic competitiveness, which stems from a unique combination of attractions that cannot be found elsewhere," says Omar Ayesh, chairman of Nobles.
The Tripoli Towers project is in partnership with OYA Tourism Investment and Development, a unit of Libya's Economic and Social Development Fund (ESDF).
The preparedness of the Libyan government to seek partnerships with its Gulf partners is apparent thousands of feet above the ground, too.
In April this year, the UAE and Libya signed an air transport agreement to boost economic and commercial cooperation. The two sides also inked an initial agreement which will give Etihad Airways the right to run 21 flights to three Libyan airports of Tripoli, Benghazi and Sabha as of winter 2010.
Emirates Airline, meanwhile, started to fly to Libya in March 2001 with three flights a week. That has since increased to daily operations - four flights a week go direct to Libya and three go via Tunis. On each flight, there is rarely a space to be had in any of the 12 first class or 42 business class seats.
"Our revenues and passenger numbers from our Libya flights have risen between 25 and 30 percent in each of the last two years," says Emirates official Adnan Kazim. He adds that such is the demand for direct flights to Tripoli, Emirates is examining plans to increase their frequency.
"It is really opening up and the main focus for us has been businessmen and traders traveling to Dubai and to the Far East," he continues. "There are also more and more investors going to Tripoli, and so we have very few empty seats in our cabins on those flights."
Qaddafi and 38 years of rule
Libya's hardline leader Colonel Qaddafi has been a thorn in the West's side ever since he seized power in 1970.
Tensions increased between the North African state and the US during the 1970s when Qaddafi expelled all US oil firms from the country and banned US ships from Libyan waters.
Just months before the US cut all diplomatic relations with Libya in 1980, the American embassy in Tripoli was stormed by pro-Iranian revolution demonstrators.
Relations cooled further between the two countries during the 1980s. In 1986 the US froze all Libyan assets in its banks and, in the same year, bombed Tripoli and nearby military bases leaving 100 people dead.
America said the attack was in retaliation to the terrorist bombing of a nightclub in Berlin, which left 40 US soldiers dead. Relations then hit an all-time low in 1988 when a Pan AM jet blew up over the Scottish town of Lockerbie, killing 270.
Libya's stuttering economy was dealt a hammer blow in 1992 when the UN finally imposed sanctions. But seven years later, the first signs of a thawing of relations with the West emerged when Libya handed over two suspects in the Lockberbie bombing.
In 2003, the UN lifted sanctions and Libya accepted full responsibility for Lockerbie, agreeing to pay $2.7bn in compensation to the victims' families. In 2006 the US re-opened full diplomatic ties.
Libya's hardline leader Colonel Qaddafi has been a thorn in the West's side ever since he seized power in 1970.
Tensions increased between the North African state and the US during the 1970s when Qaddafi expelled all US oil firms from the country and banned US ships from Libyan waters.
Just months before the US cut all diplomatic relations with Libya in 1980, the American embassy in Tripoli was stormed by pro-Iranian revolution demonstrators.
Relations cooled further between the two countries during the 1980s. In 1986 the US froze all Libyan assets in its banks and, in the same year, bombed Tripoli and nearby military bases leaving 100 people dead.
America said the attack was in retaliation to the terrorist bombing of a nightclub in Berlin, which left 40 US soldiers dead. Relations then hit an all-time low in 1988 when a Pan AM jet blew up over the Scottish town of Lockerbie, killing 270.
Libya's stuttering economy was dealt a hammer blow in 1992 when the UN finally imposed sanctions. But seven years later, the first signs of a thawing of relations with the West emerged when Libya handed over two suspects in the Lockberbie bombing.
In 2003, the UN lifted sanctions and Libya accepted full responsibility for Lockerbie, agreeing to pay $2.7bn in compensation to the victims' families. In 2006 the US re-opened full diplomatic ties.
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