Sarkozy seeks more Qaddafis in quest to win business contracts
Tuesday, 1 January 2008
Celestine Bohlen
DURING a visit this month to Paris, Libyan leader Muammar Qaddafi, a one-time international pariah, thumbed his nose at his French hosts, accusing them of violating women's rights and treating African immigrants poorly.
Halfway through Qaddafi's stay, French President Nicolas Sarkozy explained why he put up with his guest's provocative antics: business. "I am really engaged in the battle for contracts,'' he said.
Sarkozy, 52, has been waging the same battle -- complete with a "war room" -- across North Africa, using contract diplomacy to replant the French flag in a region rich with oil, gas and cash where U.S. and U.K. companies are increasingly making inroads.
The French leader, who's visited China and the U.S. since taking office in May, has turned his attention closer to home in the past two months. He paid state visits to former French colonies Morocco and Algeria and set out the welcome mat for Qaddafi.
"What is clear is that Sarkozy and other French officials want France to be back in the region in a very important and visible way,'' says Francis Perrin, editorial manager at the Paris-based Arab Petroleum Research Center.
Just weeks after Sarkozy was sworn in, a visit by then- U.K. Prime Minister Tony Blair to Libya resulted in a $2.0 billion gas appraisal and exploration project for BP Plc, the biggest of its kind for Europe's second-largest oil company. Occidental Petroleum Corp., Exxon Mobil Corp. and Chevron Corp. are among US companies to win drilling rights in Libya.
One day before Qaddafi's Paris trip began, OAO Gazprom, Russia's natural-gas monopoly, and Royal Dutch Shell Plc, Europe's largest oil company, said they won Libyan exploration permits, beating Gaz de France SA and Total SA, two of France's largest energy firms.
In October, after the Moroccan government opted for US-made F16 fighter jets over French-made Rafale planes, Sarkozy said he was setting up a war room at the Elysee Palace to help French companies sell their wares.
"As a good politician, Sarkozy has to show his constituents that he is bringing home the bacon,'' said Francois Heisbourg, director of the Foundation of Strategic Studies, a Paris research institute.
The war room faces a few stark facts: France's trade deficit in the year through September was 31 billion euros ($44.5 billion), compared with Germany's 147 billion-euro surplus, according to Eurostat, the Luxembourg-based statistical agency.
"France cannot be absent,'' says Olivier Dassault, a parliamentarian and corporate director of Dassault Aviation SA, which makes Rafale jets and Falcon business planes.
The Libyan visit may have made up for the disappointment in Morocco.
It produced defense contracts, including a possible sale of 14 Rafale fighter jets. If concluded next summer, it would mark the first export of the jet.
Other pending contracts include the sale of 35 helicopters, six naval vessels and radars for anti-missile systems.
Libya also agreed to buy 21 Airbus aircraft, with an option for nine more.
That, and a preliminary accord to cooperate on nuclear power, was enough for Sarkozy to gloat about "contracts worth about 10 billion euros'' after his first Qaddafi meeting.
"This is announcement politics,'' says Mycle Schneider, a Paris-based energy consultant. "History is full of projects that don't materialise.''
Libya, home to Africa's largest oil reserves, is the region's biggest prize ever since the U.S. and the United Nations lifted sanctions in 2004 after Qaddafi renounced terrorism and a nuclear-weapons program.
"That there is a bonanza in Libya is true,'' Heisbourg said.
"There is enormous pent-up demand, accumulated reserves and oil that is now worth $90 a barrel.
They are rolling in cash, which they haven't had the opportunity to spend in 15 years or so. Now they are going on a binge.''
Libya this month announced it is setting aside $100 billion to buy foreign assets and another $155 billion for local projects such as housing, education and communications.
Members of Sarkozy's own government were openly critical of the Qaddafi visit.
Rama Yade, secretary for human rights in the Foreign Ministry, said France "is not a doormat on which a leader, terrorist or not, can come and clean the blood of his misdeeds off his feet.''
His Foreign Minister Bernard Kouchner avoided meeting the Libyans and criticised them in Parliament.
Defending Qaddafi's five-day trip, Sarkozy said France invited the Libyan leader only after the release in July of foreign medics held in Libyan prisons for eight years.
"Just go to Tripoli, and you'll see business people crawling all over the place,'' Heisbourg says. "The Brits didn't wait, neither did the Germans or the Italians.''
In both Libya and Algeria, France is proposing cooperation on nuclear power, playing a card held by Paris-based Areva SA, the world's largest nuclear-plant builder.
While Areva Chief Executive Anne Lauvergeon says it'll be some time before such projects can move forward, Sarkozy presents the offer as a "bridge'' to the Muslim world, signaling to countries such as Iran the benefits of renouncing nuclear-weapons programmes.
Qaddafi's Paris visit, followed by another contract-signing trip to Spain, showed who has the upper hand.
"The Libyans' position is very strong because they are one of the few oil-producing countries that remain open to foreign investment,'' Perrin says. "That is a very strong trump card.''
Bloomberg
DURING a visit this month to Paris, Libyan leader Muammar Qaddafi, a one-time international pariah, thumbed his nose at his French hosts, accusing them of violating women's rights and treating African immigrants poorly.
Halfway through Qaddafi's stay, French President Nicolas Sarkozy explained why he put up with his guest's provocative antics: business. "I am really engaged in the battle for contracts,'' he said.
Sarkozy, 52, has been waging the same battle -- complete with a "war room" -- across North Africa, using contract diplomacy to replant the French flag in a region rich with oil, gas and cash where U.S. and U.K. companies are increasingly making inroads.
The French leader, who's visited China and the U.S. since taking office in May, has turned his attention closer to home in the past two months. He paid state visits to former French colonies Morocco and Algeria and set out the welcome mat for Qaddafi.
"What is clear is that Sarkozy and other French officials want France to be back in the region in a very important and visible way,'' says Francis Perrin, editorial manager at the Paris-based Arab Petroleum Research Center.
Just weeks after Sarkozy was sworn in, a visit by then- U.K. Prime Minister Tony Blair to Libya resulted in a $2.0 billion gas appraisal and exploration project for BP Plc, the biggest of its kind for Europe's second-largest oil company. Occidental Petroleum Corp., Exxon Mobil Corp. and Chevron Corp. are among US companies to win drilling rights in Libya.
One day before Qaddafi's Paris trip began, OAO Gazprom, Russia's natural-gas monopoly, and Royal Dutch Shell Plc, Europe's largest oil company, said they won Libyan exploration permits, beating Gaz de France SA and Total SA, two of France's largest energy firms.
In October, after the Moroccan government opted for US-made F16 fighter jets over French-made Rafale planes, Sarkozy said he was setting up a war room at the Elysee Palace to help French companies sell their wares.
"As a good politician, Sarkozy has to show his constituents that he is bringing home the bacon,'' said Francois Heisbourg, director of the Foundation of Strategic Studies, a Paris research institute.
The war room faces a few stark facts: France's trade deficit in the year through September was 31 billion euros ($44.5 billion), compared with Germany's 147 billion-euro surplus, according to Eurostat, the Luxembourg-based statistical agency.
"France cannot be absent,'' says Olivier Dassault, a parliamentarian and corporate director of Dassault Aviation SA, which makes Rafale jets and Falcon business planes.
The Libyan visit may have made up for the disappointment in Morocco.
It produced defense contracts, including a possible sale of 14 Rafale fighter jets. If concluded next summer, it would mark the first export of the jet.
Other pending contracts include the sale of 35 helicopters, six naval vessels and radars for anti-missile systems.
Libya also agreed to buy 21 Airbus aircraft, with an option for nine more.
That, and a preliminary accord to cooperate on nuclear power, was enough for Sarkozy to gloat about "contracts worth about 10 billion euros'' after his first Qaddafi meeting.
"This is announcement politics,'' says Mycle Schneider, a Paris-based energy consultant. "History is full of projects that don't materialise.''
Libya, home to Africa's largest oil reserves, is the region's biggest prize ever since the U.S. and the United Nations lifted sanctions in 2004 after Qaddafi renounced terrorism and a nuclear-weapons program.
"That there is a bonanza in Libya is true,'' Heisbourg said.
"There is enormous pent-up demand, accumulated reserves and oil that is now worth $90 a barrel.
They are rolling in cash, which they haven't had the opportunity to spend in 15 years or so. Now they are going on a binge.''
Libya this month announced it is setting aside $100 billion to buy foreign assets and another $155 billion for local projects such as housing, education and communications.
Members of Sarkozy's own government were openly critical of the Qaddafi visit.
Rama Yade, secretary for human rights in the Foreign Ministry, said France "is not a doormat on which a leader, terrorist or not, can come and clean the blood of his misdeeds off his feet.''
His Foreign Minister Bernard Kouchner avoided meeting the Libyans and criticised them in Parliament.
Defending Qaddafi's five-day trip, Sarkozy said France invited the Libyan leader only after the release in July of foreign medics held in Libyan prisons for eight years.
"Just go to Tripoli, and you'll see business people crawling all over the place,'' Heisbourg says. "The Brits didn't wait, neither did the Germans or the Italians.''
In both Libya and Algeria, France is proposing cooperation on nuclear power, playing a card held by Paris-based Areva SA, the world's largest nuclear-plant builder.
While Areva Chief Executive Anne Lauvergeon says it'll be some time before such projects can move forward, Sarkozy presents the offer as a "bridge'' to the Muslim world, signaling to countries such as Iran the benefits of renouncing nuclear-weapons programmes.
Qaddafi's Paris visit, followed by another contract-signing trip to Spain, showed who has the upper hand.
"The Libyans' position is very strong because they are one of the few oil-producing countries that remain open to foreign investment,'' Perrin says. "That is a very strong trump card.''
Bloomberg