Libyan Oil Contracts: Negotiating the Future Generation of EPSA

Training and Employment Strategy

In the mid of 1970s, the NOC introduced a program to increase recruitment of Libyan nationals in the oil and gas industry. The program was labeled “Libyanization” and required the IOCs to train Libyans and identify jobs that could be held by Libyan citizens. The Libyanization was not whole-heartedly welcomed by the IOCs for many reasons.

Even after more than 30 years since its introduction, the implementation of the Libyanization policy is still sluggish. In 2009, the NOC announced its plan to launch 700 projects in 2009 alone, of which the budget of 550 projects was approved. The Chairman of the National Oil Corporation (NOC) at that time, the late Dr. Shukri Ganem stated that "We are looking for long term gains not short term ones. We are concerned that most of the engineering work is done outside the country." He also added that "Our graduates are becoming unemployed while we give jobs to people from outside ... this is not to the benefit of Libya in the long term… We need to build engineering capacity in this country". (The Tripoli Post 28 February 2009

Article 5.7 of EPSA IV requires IOCs to hire Libyan nationals to carry out Petroleum Operations in the Contract Area. The IOC may hire non-Libyan nationals in specialized technical jobs or key management positions if no Libyan national is capable of performing the tasks. Article 5.7.2 details the procedures and the timetable to train Libyan personnel.

Training and preparing Libyans to hold certain positions within each sector of operations could be considered burdensome by IOCs. IOCs could argue that implementing a training program under Article 5.7.2 of EPSA IV, or any other contract, is beyond its aims of investment in Libya. In the meantime, such a training program should not be considered a point of disagreement and complaints by the IOCs should be considered by the NOC. As a suggestion to bring both sides together and to agree on the Libyanization program, the NOC should invest in providing a solid foundation for dedicated Libyan technicians and engineers prior to enforcing EPSA terms related to employing Libyan citizens.

Other areas of concern

Other areas of concern during the course of negotiations of EPSA V may include inserting a stabilization clause, the execution of work programs, types of operations and issues relating to taxes.

Dr. Mohamed Karbal is a New York lawyer and founding partner of Karbal & Co, a full-service international law firm with offices in Libya and Dubai that serves the needs of international and domestic client with their operations in Libya and the United Arab Emirates.

No comments yet.

Leave a Reply