By Sami Zaptia.
London, 17 June 2019:
Libya’s state National Oil Corporation (NOC) reported on Saturday the restoration of natural gas supply to the Libya Norwegian Fertiliser Company (LifeCo), with factory operations expected to restart shortly.
The NOC reported that following discussions led by its chairman, Mustafa Sanalla, a breakthrough agreement was reached between NOC and LifeCo’s shareholders, the Libyan Investment Authority (LIA), and Yara International ASA (Yara), at a meeting on June 13, 2019, to discuss ‘‘current challenges facing the joint-venture’’.
The NOC reported that LifeCo shareholders have agreed on a number of measures to restore operational continuity and protect jobs, including the restoration of gas supply and NOC assuming control of the marketing of ammonia and urea fertiliser products.
Sanalla commented that “this breakthrough agreement will protect the interests of the Libyan state as well as the jobs of LifeCo employees. NOC will use all of its talents and experience to market these products and restore the company’s financial security.”
It will be recalled that that LifeCo was formed in 2009 during the Qaddafi era as a joint venture, with Yara holding 50% of the shares and both NOC and the Libyan Investment Authority each with a 25% stake.
It will also be recalled that in January this year, the NOC suspended the supply of natural gas to LifeCo pending settlement of its unpaid debts.
The NOC had said that it had attempted to resolve the issue through various consultations aimed at rooting out “corruption” and ensuring operational continuity at LifeCo plants.
It had said that it had held a series of meetings with the management of the Norwegian foreign partner, Yara and LifeCo’s board of directors to discuss arrangements that ensure LifeCo’s partner assumes its financial responsibility towards collective debts.
It had reported that the outstanding debts had amounted to LD 210 million and € 31 million owed to Sirte Oil Co, and over USD 80 million owed to the NOC.
The NOC had reported in January that talks to negotiate a solution had not been successful as a result of “Yara’s refusal to assume repayment responsibility, expecting the NOC to solely finance LifeCo’s operations, while continuing to market its products internationally – resulting in an unequal relationship; profitable to Yara, but loss-making for NOC”.
The NOC had assured LifeCo employees that job protection remained its absolute priority, while it retains its right to hold financial defaulters, from any party, accountable.
The NOC had said that it would exploring various solutions to the problem to ensure the continuity of the company and the resumption of business as soon as possible – thereby securing the future of staff and transforming it into a profitable and transparent company serving the national economy.
Yara has already been fined US$ 48 million for bribery of government officials and seen a number of its staff, including Yara’s top legal advisor, found guilty of corruption and sentenced to imprisonment by a Norwegian court.