The closures are part of wider plans by the government to boost the jobs market for locals. However, Bernd Sommer, head of Medoil's works council, says 'the official version is that the move will create new jobs in Libya for Libyans, but one national oil company [NOC] has told us it is engaging cheap buyers from the Philippines to replace us'.

The closure of the two procurement companies is causing concern for international oil services companies, worried about how they will be paid in the future.

'Both foreign suppliers and NOCs will suffer from the political decision to close because the two companies will vanish and no qualified replacement will be available,' says Sommer. 'Twenty years of expertise will be lost.'

To deal with the concerns, employees of the NOCs and the overseas procurement firms are joining forces to establish private companies to take over the role of Medoil and Umm al-Jawaby (MEED 9:3:07).

Meanwhile, Medoil has yet to be given a definitive date for closure, according to Sommer. 'An official closing date has not been presented by Medoil management to the works council,' he says.

'But with the number of our orders declining dramatically, most of our employees will have left by the end of 2007.'