ABDULLA SALEM EL-BADRI Chairman of the NOC

United World: How would you define EPSA and its international implications?

Mr. El Badri: It means Libya is open to international investment in as far as oil is concerned. We are opening the country for oil and gas exploration. We are giving qualified oil companies a chance, regardless of their nationality, to explore and develop this sector. There is no favoritism here; we were as transparent as possible in this bidding process. I am against going back to the old direct negotiation process; there are almost 120 oil companies worldwide and it simply isn't feasible to limit ourselves to few nowadays.
There are exceptions if we want to combine upstream and downstream activities with a foreign company, but other than that, we will stand by the open bidding for oil blocs.

United World: How do you interpret the results of the second bidding round of the EPSA IV, which saw most winning bids go to Asian companies?

Mr. El Badri: The second round was not so different from the first one, with the exception of the glaring fact that the first round was dominated by American oil companies and the second, as you said, saw newcomers from Asia. It was their first experience here and I think they realized that if they didn't bid aggressively low, they wouldn't be able to compete with the rest; that's what they did and the results were successful for them. We are happy with all the results we have had so far because it has introduced a diversity within the oil sector; we now have America, Chinese, Japanese, Indonesian, and Australian companies and so on, working here. The most important thing to me is to discover oil and develop our infrastructure; we are doing all this to increase our reserves and our production capabilities. This is our goal. I hope that all the companies that sign with us will properly implement the terms in the agreement and be successful in executing their plans; today, oil is technology, if you do not have the technology, you cannot progress.

United World: It seems that EPSA is paving the way for the liberalization of the Libyan market, what do you think will be the knock-on effect of EPSA on other sectors of the economy?

Mr. El Badri: Naturally it will influence the growth of our economy in a positive way. The income of oil comes from two sides; the cost of each barrel and how you get that barrel sold. It is not a matter of how much money we give to the treasury, it is a question of how much money we spend inside the country to deliver that barrel; you need bring in maintenance companies, drilling companies, catering, transportation. There are many different activities involved in that process, and some of these services will be provided by foreign companies, others will be from local ones. The foreign companies will hire local staff; they will spend some money here for daily needs. Therefore, overall yes, it will bring about positive changes in the economy as a whole.

United World: How would you describe the Libyan-American relationship in the oil sector?

Mr. El Badri: Let me be frank with you. The oil sector in Libya is an American industry. Now, throughout the years, the market here has transformed; we have European, Australian, and Asian operators. All the spare parts and equipment for this sector come from the United States. The original know-how we have here came from the US. One cannot really run this industry without American influence in some shape or form. The relationship between the NOC and American oil companies is excellent. We know them and we know their intentions; they know their business and they understand our needs. The only obstacle at the moment is Libya's remainder on the list of terrorism-sponsoring states; unless we are removed from that list, we will continue to have problems in many areas, such as visas, equipment, etc. We cannot continue like this for long. The American Oil companies that are setting up here have restrictions on bringing in their own experts and specialists, their technology, and certain equipment. This makes work difficult for them and for us.

United World: What is the NOC's short-term and medium-term goals?

Mr. El Badri: Our short-term objective is to produce 2 million b/d. I am confident that we will achieve this by 2006 or 2007. We need to develop our refineries; the one in Ras-Lanuf needs an investment of $2 billion, just for the refinery. Developing it and other ones will allow us to increase our production.

United World: One of Libya's greatest challenges is diversifying its oil-based economy. As the chairman of one of the most successful state-owned company in Libya, what is your message to non-oil businessmen who are looking to Libya is a future destination?

Mr. El Badri: When I look at what is happening around the world, the first thing that comes to mind is security; Libya is one of the safest countries in the region and the world for that matter. As a tourist destination, it is virgin territory; we have excellent beaches and a lot of history. We understand that investors who come here are looking to make a profit; this is a reality we are very much aware of. However, it is up to us to determine how much profit foreign companies should make; we make money, they make money.

United World: Thank you very much for your comments.

Mr. El Badri: Thank you.