Libya 'wants to sell large Tamoil stake' OIL:

Saturday, Apr 30, 2005

Libya is looking to sell a significant stake in Tamoil, the state-owned oil refiner and gas station operator, according to a son of Muammer Gadaffi, the north African country's long-time leader.

Saadi Gadaffi, who represents Tamoil in Italy, told the Financial Times that he thought negotiations were in progress with "many Italian companies".

"They want to sell shares," said Mr Gadaffi. "A maximum of 50-60 per cent, not more. They want to give a majority to a foreign company."

Mr Gadaffi indicated that potential buyers were likely to be Italian "because 60 per cent of Tamoil International is in Italy".

He suggested that half of the company could be worth at least Euros 1bn (Dollars 1.29bn).

Eni, Italy's largest oil company, is unlikely to be interested as it is cutting back its downstream operations, although its Agip unit remains the country's largest gas station operator.

ERG, one of Italy's mid-sized oil companies, had no comment. However, the company is interested in expanding in the retail market and would be likely to take an interest if any of its competitors were looking to forge deals.

Mr Gadaffi made clear he did not favour selling control of Tamoil. "(To sell) less than the majority maybe is good," he said. "But you know the reason to sell is very specific. The fact is there is a problem in Tamoil, or Libya doesn't want Tamoil, so it's just to escape."

Tamoil does not publicly release its financial statements. But one Italian energy executive said that it was well known within the industry that Tamoil was losing money.

He said Tamoil had been used as an outlet for Libya's crude oil and petroleum product exports to Europe, but the supply of oil products had been constrained in recent years as Libyan refineries were in need of an upgrade. He said this, in turn, had led to losses at Tamoil.

The sale of Tamoil would also mark a change in tack for Libya, which has used the company to expand its international downstream operations since Oilinvest, Libya's foreign oil investment arm, bought control of Tamoil in 1988.

Oilinvest has since extended Tamoil's business into Germany, Switzerland, Spain and the Netherlands.

In recent years, Tamoil has expanded in Africa with networks of service stations in Egypt, Burkina Faso, Chad, Mali and Niger.

By ADRIAN MICHAELS, KEVIN MORRISON and DAVID OWEN