Posted on 12/13/2002 2:28:45 PM PST by Clive
AS the fuel crisis threatens to grind the economy to a halt, officials from Libya's Tamoil Trading Ltd are in Zimbabwe in a bid to rescue the rapidly deteriorating situation.
The latest arrangement involves the setting up of a joint- venture company between state procurement agency Noczim and the Libyan company to be known as Tamoil-Zimbabwe (Pvt) Ltd.
The Libyan initiative comes as Zimbabwe is running dry as a result of non-payment. Industry sources said the Independent Petroleum Group (IPG) of Kuwait was holding up supplies because of an unsettled US$65 million account.
The sources said Zimbabwe also owed other suppliers US$106 million. The Libyans are said to be now demanding cash-on-delivery for fuel as well as what they are owed.
Official sources yesterday said the Libyan delegation has been in the country for nine days trying to arrange a new fuel deal with government.
Zimbabwe wants to import 87 000 metric tonnes of fuel a month. The procurement cost of fuel through the Beira pipeline amounts to US$360 million a year. Normally the country buys fuel through short-term credit financing, cash, or long-term credit facilities.
The long-term financing has been arranged through the Libyan Arab Foreign Bank. This is a revolving facility and is drawn through stand-by letters of credit. The Bank of Negara of Malaysia is also involved in financing fuel procurement through a clearing agreement with the Reserve Bank of Zimbabwe.
Energy and Power Development minister Amos Midzi yesterday refused to explain the currentshortage. "I'm not talking about anything to do with that (fuel) at the moment," he said.
However, on November 27 he told parliament that Noczim had entered into a 50:50 deal with Tamoil. He said the company would be involved in wholesale procurement and distribution of fuel to retail outlets which carry the Tamoil brand.
"As part of its equity Noczim will put forward some of its existing assets such as storage tanks," he said. "The new company is expected to introduce more competition in the retail sector as well as bring a new brand of fuel on the market."
Sources said the Libyans were also trying to muscle in on Petrozim - a 50:50 joint venture between Noczim and Lonrho - by acquiring the Noczim stake. The Libyans, who eventually want to take over the company, are said to have brought with them Italian engineers who have valued Petrozim at US$48 million. But the company thinks it is worth US$100 million.
Petrozim owns the Feruka-Harare pipeline, which sources say currently has diesel and Jet A1 flowing through it, and the Msasa depot. The company transports and distributes fuel.
The industry sources said the Libyans, who have taken up government equities in several companies, also want a stake in the government-owned Industrial Development Corporation. The sources said before the Libyans arrived, government had been contemplating dispatching teams to Libya and Kuwait in search of fuel.
"They wanted to target small Kuwaiti companies because major companies are refusing to deal with them due to their poor credit rating," a source said.
The source said Zimbabwe was promised fuel in Kuwait at a US 16 cents premium by Elf Aquitaine. Government wanted Nigeria to act as conduit for fuel to evade a perceived Western blockade of direct supplies.
Libya - the biggest oil producer in Africa and a major player in Europe - has been Zimbabwe's major fuel supplier until the problematic US$360 million fuel deal with Tamoil collapsed recently. The Libyans are now attempting to withdraw from barter deals that centred on land.
Tamoil is 55% owned by Europoil Netherlands BV, a private consortium, and 45% by National Oil Corporation, which together with 33 subsidiaries, is the biggest Libyan fuel company.
Sources said the fuel situation is deteriorating because government has rejected the international oil companies' proposal to import their own commodity and sell it for $420/ litre for petrol and $389/litre for diesel.
To make matters worse, foreign currency supplies to Noczim have also dwindled because of the closure of bureaux de change that supplied the Jewel Bank at US$1 to between $1 000 and $1 500. The Jewel Bank is selling foreign exchange to Noczim at US$1:$1 800.
Are you sure that's what Libya is doing?
Getting Zimbabwe out of trouble? I was posting tongue-in-cheek. Any "rescue" by Libya will make a bad situation even worse.
The Libyans and Italians - what a combination - want to take over a Zimbabwe company? Sounds like a plot from a Peter Sellers movie.
I guess they have what they want.
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