LIFTING OF TRADE EMBARGO CREATES OPPORTUNITIES FOR US EQUIPMENT EXPORTS TO LIBYA
March 19, 2007
Shipping Digest
William Armbruster
A complete U.S. trade embargo against Libya after a bomb planted by Libyan agents caused the explosion of a Pan Am jet in December 1988 brought an abrupt halt to all business deals between the two countries.
Now, however, prospects are bright for companies that can supply equipment needed to maintain and expand oil production and to improve the country’s infrastructure. The U.S. lifted the embargo last year after Libyan leader Muammar Qaddafi renounced the country’s program to build weapons of mass destruction.
During a recent International Transport and Logistics Exhibition in Tripoli, U.S. manufacturers received orders for road and rail transportation vehicles, airplanes, agricultural machines, construction equipment, foodstuffs, automobiles, sporting goods and, above all, oil- and energy-related equipment, according to Peter Schauer, chief executive of Orion Marine.
In addition, other U.S. corporate executives who recently visited Libya were quite enthusiastic about prospects for future orders, said Schauer, who was staying at the posh Corinthia Hotel in Tripoli at the same time they were there. He said he did not know how many of them had signed letters of intent.
Schauer, who specializes in exports to markets generally considered to be off the beaten track, hopes to get back in the business of supplying irrigation equipment for Libya’s Great Manmade River Project. “What they’re doing is building huge pumping systems hundreds of miles south of the Mediterranean. They’re tapping the aquifer and pumping the water up north to the cities,” he said.
Water is already flowing even though Phase 1 of the project is not finished, Schauer said, and the completion date is not yet certain because the Libyans are still making constant modifications.
Orion managed a shipment of U.S. irrigation equipment before the trade embargo and had a second one waiting at the Port of Houston when the U.S. halted all commercial ties with Libya.
The Chicago-based company has handled several containerloads of sample equipment for the same distributor that had a contract with the construction company before the U.S. imposed the embargo.
Meanwhile, the Libyans are talking about a second phase of the irrigation project, which would carry an estimated $10 billion price tag.
Schauer said U.S. companies face stiff competition from European nations, particularly Italy, Libya’s former colonial master. In addition, Chinese and Koreans are actively involved in the Libyan market, he said. The Russians, who recently forgave a multibillion-dollar debt for armaments delivered to Libya years ago, are also eyeing the market.
Schauer said Orion is now participating in a sizable project to destroy and neutralize chemical weapons.