

Currently released so far... 12553 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
2011/05/01
2011/05/02
2011/05/03
2011/05/04
2011/05/05
2011/05/06
2011/05/07
2011/05/08
2011/05/09
2011/05/10
2011/05/11
2011/05/12
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
APECO
ASEC
AMGT
AFIN
APER
ACABQ
AORC
AEMR
AF
AE
AR
AGMT
AU
AY
ABLD
AS
AG
AJ
APCS
AX
AM
AMEX
ATRN
ADM
AMED
AFGHANISTAN
AZ
AL
ASUP
AND
ARM
ASEAN
AFFAIRS
AQ
ATFN
AMBASSADOR
AODE
APEC
ACBAQ
AFSI
AFSN
AO
ABUD
AC
ADPM
ADCO
ASIG
ARF
AUC
ASEX
AGAO
AA
AER
AVERY
AGRICULTURE
AIT
AADP
ASCH
AORL
AROC
ACOA
ANET
AID
AMCHAMS
AINF
AMG
AFU
AN
ALOW
ASECKFRDCVISKIRFPHUMSMIGEG
ACS
ADANA
AECL
ACAO
AORG
AGR
BEXP
BR
BM
BG
BL
BA
BTIO
BO
BP
BC
BILAT
BK
BU
BD
BRUSSELS
BB
BF
BBSR
BIDEN
BX
BE
BH
BT
BY
BMGT
BWC
BTIU
BN
CA
CASC
CFED
CO
CH
CS
CU
CE
CI
CM
CMGT
CJAN
COM
CG
CIS
CVIS
CR
CKGR
CHR
CVR
COUNTER
CIA
CLINTON
CY
CPAS
CD
CBW
COUNTERTERRORISM
CITEL
CDG
CW
CODEL
COUNTRY
CLEARANCE
COE
CN
CARICOM
CB
CONDOLEEZZA
CWC
CACS
CSW
CIDA
CIC
CITT
CONS
CL
CACM
CDB
CDC
CAN
CF
CJUS
CTM
CBSA
CARSON
CT
CLMT
CBC
CEUDA
CV
COPUOS
CTR
CROS
CAPC
CAC
CNARC
CICTE
CBE
ECON
ETRD
EIND
ENRG
EC
ELAB
EAGR
EAID
EFIS
EFIN
EINV
EUN
EG
EPET
EAIR
EU
ELTN
EWWT
ECIN
ERD
EI
ETTC
EUR
EN
EZ
ETC
ENVI
EMIN
ET
ENVR
ER
ECPS
EINT
EAP
ES
ENIV
ECONOMY
EXTERNAL
EINN
EFTA
ECONOMIC
EPA
EXBS
ECA
ELN
ETRDEINVECINPGOVCS
ENGR
ECUN
ENGY
ECONOMICS
ELECTIONS
EIAR
EINDETRD
EREL
EUC
ECONEFIN
EURN
EDU
ETRDEINVTINTCS
ECIP
ENERG
EFIM
EAIDS
EK
ETRDECONWTOCS
EINVETC
ECONCS
EUNCH
ESA
ECINECONCS
EUREM
ESENV
EFINECONCS
ETRC
ENNP
EAIG
EXIM
EEPET
EINVECONSENVCSJA
EUMEM
ETRA
ERNG
ETRO
ETRN
EINVEFIN
ICTY
IN
IS
IR
IC
IZ
IA
INTERPOL
IAEA
IT
IMO
IO
IV
ID
IRAQI
IEA
INRB
IL
IWC
ITU
ICAO
ISRAELI
ICRC
IIP
IMF
IBRD
ISLAMISTS
ITALY
ITALIAN
ILO
IPR
IQ
IRS
IAHRC
IZPREL
IRAJ
IDP
ILC
ITF
ICJ
IF
ITPHUM
INMARSAT
ISRAEL
IACI
IBET
ITRA
INR
IRC
IDA
ICTR
IGAD
INRA
INRO
IEFIN
INTELSAT
INTERNAL
INDO
ITPGOV
KWMN
KSCA
KDEM
KTFN
KIPR
KCRM
KPAL
KE
KPAO
KPKO
KS
KN
KISL
KFRD
KJUS
KIRF
KFLO
KG
KTIP
KTER
KRCM
KTIA
KGHG
KIRC
KU
KPRP
KMCA
KMPI
KSEO
KNNP
KZ
KNEI
KCOR
KOMC
KCFC
KSTC
KMDR
KFLU
KSAF
KSEP
KSAC
KR
KGIC
KSUM
KWBG
KCIP
KDRG
KOLY
KAWC
KCHG
KHDP
KRVC
KBIO
KAWK
KGCC
KHLS
KBCT
KPLS
KREL
KCFE
KMFO
KV
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KVPR
KTDB
KSPR
KIDE
KVRP
KTEX
KBTR
KTRD
KICC
KCOM
KO
KLIG
KDEMAF
KMRS
KRAD
KOCI
KSTH
KUNR
KNSD
KGIT
KFSC
KHIV
KPAI
KICA
KACT
KHUM
KREC
KSEC
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCMR
KPIN
KESS
KDEV
KNAR
KNUC
KPWR
KENV
KWWMN
KWMNCS
KPRV
KOM
KBTS
KCRS
KNPP
KWNM
KRFD
KVIR
KTBT
KAID
KRIM
KDDG
KRGY
KHSA
KWMM
KMOC
KSCI
KPAK
KX
KPAONZ
KCGC
KID
KPOA
KIFR
KFIN
KWAC
KOMS
KCRCM
KNUP
KMIG
KNNPMNUC
KERG
KTLA
KCSY
KJUST
MOPS
MARR
MASS
MNUC
MX
MCAP
MO
MR
MI
MD
MK
MA
MP
MY
MTCRE
MOPPS
MASC
MIL
MTS
MLS
MILI
MAR
MU
MEPN
MAPP
MTCR
MEPI
MZ
MEETINGS
MG
MW
MAS
MT
MCC
MIK
ML
MARAD
MV
MERCOSUR
MTRE
MPOS
MEPP
MILITARY
MDC
MQADHAFI
MUCN
MRCRE
MAPS
MEDIA
MASSMNUC
MC
NZ
NZUS
NL
NU
NATO
NP
NO
NIPP
NE
NH
NR
NA
NPT
NI
NSF
NG
NSG
NAFTA
NC
NDP
NEW
NRR
NATIONAL
NT
NS
NASA
NAR
NV
NORAD
NSSP
NK
NPA
NGO
NSC
NATOPREL
NW
NPG
NSFO
OPDC
OTRA
OIIP
OREP
OVIP
OSCE
OEXC
OIE
OPRC
OAS
OPIC
OTR
OMIG
OSAC
OFFICIALS
OECD
OSCI
OBSP
OFDA
OPCW
ODIP
OFDP
OES
OPAD
OCII
OHUM
OVP
ON
OIC
OCS
PHUM
PREL
PGOV
PINR
PTER
PARM
PREF
PM
PE
PINS
PK
PHSA
PBTS
PRGOV
PA
PORG
PP
PS
PGOF
PL
PO
PARMS
PKFK
PSOE
PEPR
PAK
POL
PPA
PINT
PMAR
PRELP
PREFA
PALESTINIAN
PBIO
PINF
PNG
PMIL
PFOR
PUNE
PGOVLO
PAO
POLITICS
PHUMBA
PSEPC
PTBS
PCUL
PROP
PNAT
PNR
POLINT
PGOVE
PROG
PHALANAGE
PARTY
PDEM
PECON
PROV
PHUMPREL
PGOC
PY
PCI
PLN
PDOV
PREO
PGIV
PHUH
PAS
PU
POGOV
PF
PINL
POV
PAHO
PRL
PG
PRAM
POLITICAL
PARTIES
POLICY
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PGGV
PHUS
PSA
PHUMPGOV
PEL
PSI
PAIGH
POSTS
PBT
PTERE
RS
RU
RW
RM
RO
RP
REGION
RSP
RF
RICE
RCMP
RFE
RIGHTS
RIGHTSPOLMIL
ROBERT
RUPREL
RELATIONS
ROOD
REACTION
RSO
REPORT
SENV
SNAR
SCUL
SR
SC
SOCI
SMIG
SI
SP
SU
SO
SW
SY
SA
SZ
SAN
SF
SN
STEINBERG
SG
ST
SIPDIS
SNARIZ
SNARN
SSA
SK
SPCVIS
SOFA
SAARC
SL
SEVN
SARS
SIPRS
SHUM
SANC
SWE
SHI
SYR
SNARCS
SPCE
SYRIA
SEN
SH
SCRS
SENVKGHG
TRGY
TSPL
TPHY
TSPA
TBIO
TI
TW
THPY
TX
TU
TS
TZ
TC
TH
TT
TIP
TO
TERRORISM
TRSY
TINT
TN
TURKEY
TBID
TL
TV
TNGD
TD
TF
TP
TFIN
TAGS
TK
TR
UNSC
UK
UNGA
UN
US
UNHRC
UG
UP
UNMIK
UNHCR
UE
USTR
UNVIE
UAE
UZ
UY
UNO
UNESCO
USEU
USOAS
UV
UNODC
UNCHS
UNFICYP
UNEP
UNIDROIT
UNDESCO
UNDP
UNPUOS
UNC
UNAUS
USUN
UNCHC
UNCHR
UNCND
UNICEF
UNCSD
UNDC
USNC
USPS
USAID
Browse by classification
Community resources
courage is contagious
Viewing cable 07TRIPOLI979, LIBYAN MARKET TESTS INTERNATIONAL OIL AND GAS COMPANIES REF: A) TRIPOLI 511 B) TRIPOLI 912
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07TRIPOLI979.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
07TRIPOLI979 | 2007-11-21 11:29 | 2011-01-31 21:30 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Tripoli |
VZCZCXRO2265
RR RUEHTRO
DE RUEHTRO #0979/01 3251129
ZNR UUUUU ZZH
R 211129Z NOV 07
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 2847
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHRB/AMEMBASSY RABAT 0513
RUEHAS/AMEMBASSY ALGIERS 0562
RUEHTU/AMEMBASSY TUNIS 0354
RUEHEG/AMEMBASSY CAIRO 0917
RUEHVT/AMEMBASSY VALLETTA 0225
RUEHRO/AMEMBASSY ROME 0338
RUEHLO/AMEMBASSY LONDON 0666
RUEHFR/AMEMBASSY PARIS 0362
RUEHTRO/AMEMBASSY TRIPOLI 3274
UNCLAS SECTION 01 OF 03 TRIPOLI 000979
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR NEA/MAG, COMMERCE FOR NATE MASON, PARIS FOR ESPOSITO,
LONDON FOR TSOU
E.O. 12958: N/A
TAGS: ECON EINV EPET ENRG LY
SUBJECT: LIBYAN MARKET TESTS INTERNATIONAL OIL AND GAS COMPANIES REF: A) TRIPOLI 511 B) TRIPOLI 912
¶1. (SBU) Summary: Although an alluring market for the oil and gas industry, Libya is an exceptionally difficult place in which to operate. In their daily operations, international oil companies (IOC's) face numerous challenges on visas, staffing and taxation issues, and their profit margins are comparatively narrow. The situation is likely to worsen in coming years, as Libyan authorities seek to extract additional concessions from energy companies operating in the country to maximize Libya's profits, even at the expense of continuing to attract further participation by reputable IOCs in the critical oil and gas sector that is the nation's lifeblood. End Summary.
¶2. (SBU) The results of Libya's latest Exploration and Production Sharing (EPSA) bid round, which is focused on natural gas, are due to be released December 9, and the country appears to be moving ahead with plans to develop its oil and gas industry. The National Oil Corporation (NOC) has implemented three successful EPSA bid rounds since January 2005, and has also concluded lucrative one-off deals with major international oil companies (IOCs) to develop new territories (ref A). The third (i.e., most recent) EPSA round, has attracted almost 60 companies from more than 25 countries as operators and investors. With more than forty IOCs already operating in Libya and oil prices at record highs, it would seem that the sector is the place to be in Libya; however, IOCs describe it as an extremely challenging environment that consistently tests their patience and financial limits. What follows is a summary of some of the most pressing difficulties they face; Post will outline challenges faced by oil service companies septel.
NOC TAKES A HARD LINE
¶3. (SBU) In addition to renegotiating existing agreements to extract additional concessions (ref B), the NOC is taking a hard line in a number of other areas. The general sense in the GOL appears to be that the NOC holds all the cards. NOC Chairman Shukri Ghanem put it a bit more diplomatically at the recent World Energy Congress in Rome, where he said the NOC is in a position to dictate policies that reflect "changing conditions" in energy markets. The fierce competition among IOCs to enter the Libyan market and book reserves has fed the NOC's perception that it is a seller's market. It has also led to the reality that Libya features some of the smallest profit margins in the world for IOCs. One senior IOC official, whose company produces oil in partnership with a state-run firm, recently said his firm makes the same profit in a neighboring country in which its production is only one-quarter that of its production in Libya. That dramatic difference underscores the comparatively high operating costs for oil/gas producers in Libya and raises grave doubts about the profitability of deals agreed in the last two EPSA bid rounds, which featured razor-thin production sharing factors, reportedly as low as 6.8 percent of future production in at least one case.
¶4. (SBU) The NOC appears to be actively looking for ways to extract additional concessions, or to cut services previously provided to the IOCs. Part of this may be the result of the fact that the NOC is unable to effectively stave off other players in the bureaucracy, particularly the powerful General People's Committee (GPC) for Manpower, Training and Employment. Led by long-time cabinet minister and regime insider Matug Matug, the ministry has been one of the most active in pressuring IOC's to hire greater numbers of Libyans, many of whom are unqualified, The NOC is striking hard bargains with thin profit margins at the same time that it is asking IOCs to absorb ever-increasing costs -- direct and indirect -- for work done in Libya. The end result is a substantially more difficult and less profitable operating environment that has given IOCs pause to consider how seriously they want to pursue further concessions.
HERE, HAVE A MANAGER ... BETTER YET, HAVE TWO
¶5. (SBU) The increasingly restrictive labor regulations for IOCs and service companies, mandated by the GPC for Manpower, Training and Employment are particularly onerous. The GPC for Manpower recently directed that for every new expatriate hired by an IOC, one Libyan must be added to the company payroll as TRIPOLI 00000979 002 OF 003 well. It is required that certain key positions in IOCs' local offices - deputy country manager, finance manager and human resources manager - be staffed by Libyans. Companies have tried various ways to comply with these requirements, from hiring competent managers away from NOC-run companies to hiring and immediately marginalizing an "empty suit" employee. Other tactics include adding a lightly disguised expatriate layer atop the position encumbered by a Libyan and stalling with respect to encumbering positions designated for Libyan nationals. Expatriate IOC representatives consistently bemoan the time and training required to bring new Libyan hires up to speed; a lack of candidates with professional fluency in English and other basic skills is a persistent problem. IOC managers stress that they invest considerable time and resources training locally-engaged staff everywhere in the world; however, they describe Libyan employees as being less able upon hiring than most, necessitating longer, more costly training.
VISA WOES CONTINUE TO RANKLE
¶6. (SBU) At the heart of the IOCs' struggle to succeed in Libya's difficult operating environment is the constant difficulty of obtaining visas and work permits. The NOC has increasingly used visas and residency permits as a tool by which to enforce compliance with the "hire Libyan" policy, refusing to issue visas or residency permits to expatriates encumbering deputy manager, finance manager or HR manager slots. Expatriate employees often have to leave the country as their residency permit runs out and remain outside the country for weeks or months while their company works to get the permit renewed. Many companies are forced to use two-week business visas, which may be renewed twice, for up to six total weeks in country. The Byzantine visa requirements put a tremendous administrative burden on IOCs, which typically maintain up to a half-dozen locally-engaged employees to work on nothing but visas and residency permits. The GPC for Manpower's edict that a new Libyan employee be hired for each new expatriate hired has an additional, visa-related wrinkle: for each renewal of a one-year visa for an expatriate employee, an additional Libyan employee must be hired. An expatriate employee staying on for three years could be accountable for the addition of four Libyan employees (one counterpart at hiring plus one for each visa issued). The NOC reportedly opposes this requirement, but has been trumped by the GPC for Manpower.
THE TAX MAN COMETH
¶7. (SBU) Various arms of the Libyan government are also working to extract additional tax revenue from energy sector activities. This is reflected in the imposition of a two percent "Stamp Tax," which will be assessed on all contracts falling under the December EPSA round and all new contracts signed after that. This tax has been sporadically applied to other areas of the economy, specifically where foreign investment is involved, since it first appeared on the books in 1955. An effort by the Libyan Tax Authority to collect it on contracts under previous EPSA rounds was successfully contested by the affected companies, leading to the Tax Authority's announcement that all future contracts would be subject to it. There is also a move afoot to extract additional tax revenue from offshore exploration and drilling. The GOL had previously allowed the servicing of these activities out of Malta, but is now moving to curtail that and to require that they be based out of Libya. The relocation of onshore support services for offshore operations generates considerable income for the Tax Authority; offshore drilling operations can cost up to $750,000 per day for deep-water operations. In addition, the NOC recently decided it would no longer act as an intermediary between the IOCs and the Tax Authority. IOCs have been forced to hire additional staff and devote considerable resources to parsing through Libya's amorphous tax system to determine what their obligations are and how to meet them.
RISING SALARIES GUTTING STATE-RUN COMPANIES
¶8. (SBU) Libya's state-owned companies continue to protest what they consider to be unreasonably high rates for expatriate labor, and have attempted to hold a line at the rate schedule employed in 2002 during the sanctions period. Overall salaries TRIPOLI 00000979 003 OF 003 have risen about ten percent for each of the past two years, but the state-owned operator oil companies (e.g., Waha, Zeuitina) still lag well behind the IOCs in terms of compensation. They are accordingly hemorrhaging seasoned workers, who are taking advantage of high international demand for oil/gas worker to leave Libya for more lucrative opportunities in the Gulf and elsewhere. As the state-run firms fail to offer competitive wages for expatriate workers, they are unable to fill current vacancies. An example is the state-run firm Waha, which has at least 100 expatriate vacancies at present, constituting roughly one third of its expatriate workforce. The situation affects not only these companies and the NOC, but also the IOCs that depend on state-run firms as operating partners. This is the arrangement for almost all companies engaged in production and export activities. The GOL's decision (under Law No. 43 of 2006) to pull back the NOC's procurement offices in London and Dusseldorf (Umm Jawaby and Medoil, respectively) also creates problems for state-run firms, which have had their supply lines interrupted by the disruption of a long-established logistics system and the ongoing movement of more than two hundred state employees from Europe back to Libya.
9.(SBU) Comment: Libya's oil and gas sector is in many respects the bellwether for the rest of its emerging economy. The fact that IOCs, which successfully operate in some of the most forbidding environments in the world, are having such a difficult time underscores how far the GOL has to go in terms of reform if it is to achieve its stated goal of attracting greater foreign investment and commercial interest to Libya. We consistently hear expressions of disappointment from senior GOL officials that more U.S. firms have not rushed to enter Libya's market since sanctions were lifted and Libya was removed from the state sponsors of terrorism list. Pernicious requirements such as the "one expat-one Libyan" hiring policy and capricious visa policies, however, do nothing to encourage other U.S. and foreign companies with less international experience than the IOCs to enter the Libyan market. End comment. STEVENS 0 11/21/2007 11229 ECON,EINV,EPET,ENRG,LY LIBYAN MARKET TESTS INTERNATIONAL OIL AND GAS COMPANIES Although an alluring market for the oil and gas industry, Libya is an exceptionally difficult place in which to operate. In their daily operations, international oil companies (IOC's) face numerous challenges on visas, staffing and taxation issues, and their profit margins are comparatively narrow. The situation is likely to worsen in coming years, as Libyan authorities seek to extract additional concessions from energy companies operating in the country to maximize Libya's profits, even at the expense of continuing to attract further participation by reputable IOCs in the critical oil and gas sector that is the nation's lifeblood...