Tripoli still uncertain over Sirte work

16 December 2005
The award by Sirte Oil Company (SOC) of two gas pipeline construction contracts worth a combined $270 million is expected to be delayed by up to six months. The awards had been expected in December, but engineering, procurement, and construction (EPC) contractors say this has been put back until June next year following a serious car crash involving SOC chairman Ahmed Aoun. A dispute over the tender process between National Oil Corporation (NOC)and the Oil Ministry is also believed to be contributing to the delay.

Project sources say SOC has shortlisted three teams for the contracts and that its recommendations have been accepted by NOC. The selected teams are: Athens-based Joannou & Paraskevaides (J&P - Overseas), with Bonattiof Italy; India's Punj Lloyd, with DS Construction, also of India; andGermany's MAN Ferrostaal, with China Petroleum Engineering & Construction Corporation (CPECC).

However, its is understood that Oil Minister Fathi ben Shatwan wants companies to bid alone rather than as part of a team. About eight international teams submitted bids in mid-September for the two contracts, which cover the construction of the Melitah-Tripoli and Khoms-Tripoli pipelines (MEED 16:9:05).

The postponement is the latest in a series of delays to projects in the country's oil and gas sector that have left contractors feeling frustrated. And after the recent flurry of activity in the country following the lifting of international sanctions in 2004, many contractors are now turning their attention to new markets, particularly neighbouring Algeria.

Says one international EPC contractor: 'They do not seem to be able to make a decision and they are pushing for prices that do not allow us to survive. The process is much better in Algeria, where you make your bid, it is opened and then awarded. Of course there are problems there, but they are not as bad as in Libya.'

Others say that contractors seeking to do business in the country must learn to accept the challenges that exist in the country. 'We are facing problems, the same as always,' says another international contractor. 'But for us Libya is still a market worth being in, and we are staying.'

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