NOC acquires Norwegian Yara’s 50 percent stake in Libyan-Norwegian Fertilizers Company
By Sami Zaptia.
London, 4 January 2021:
Libya’s state National Oil Corporation (NOC) announced today that it had last Thursday (21 December), acquired Norwegian Yara’s 50 percent stake in the Libyan-Norwegian Fertilizers Company (Lifeco).
Lifeco was a joint venture between the state-owned Norwegian company, which held 50 percent the shares and the NOC and the Libyan Investment Authority (LIA) held 25 percent each.
Reporting the deal today, the NOC said “On Thursday 31/12/2020, the National Oil Corporation acquired the 50 percent participation of Yara, the Norwegian company, in the Libyan Norwegian Fertiliser Company following negotiations which were conducted with professionalism by all parties and the obtainment of the necessary approvals to complete this transaction according to applicable law.
Pursuant to this acquisition, the ownership of the ammonia and urea plants has been returned in full to the Libyan state with 75% to the National Oil Corporation and 25% to the Libyan Investment Authority.
Yara played a prominent cooperative role in this deal in an amicable way which guarantees the continuation of good relations between the parties. This acquisition will enable the Libyan party to restart the plants and conduct maintenance and works necessary to ensure they are well looked after and to ensure the continuation of payment of employees’ salaries”.
The Lifeco plant, was part of a chemical complex at Brega. The Brega facility is designed to produce 900,000 tonnes of urea and 700,000 tonnes of ammonia a year. It employs 1,200 people.
The deal had provided for the NOC to supply the gas feedstock on a long-term contract linked to international fertiliser prices. Yara took a lead management role and oversaw a range of upgrades to the plant.
It took two years to cut the deal, finally agreed in 2009. Lifeco JV took over the running of the Brega operation (two urea and two ammonia plants) from NOC subsidiary Sirte Oil Company (SOC). The feedstock was to be supplied through SOC. This former operator also remained in the picture thanks to an agreement which outsourced “a wide range of local services from SOC, including central warehousing, workshop and laboratory services, heavy cranes and marine services, loss-prevention services, housing, canteen and catering services, central office services and transportation.”
Yara corruption in Lifeco JV deal
In 2011 Yara reported itself to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim), after it uncovered evidence that bribes may have been part of the Lifeco JV deal. Two members of the management team were charged in 2012 in connection with unexplained payments made in 2008.