NEWSMAKER-New Libya oil minister: corrosion expert steps from the shadows

Tue Nov 20, 2012 11:32am GMT

* Abdelbari Al-Arusi worked at Sirte Oil company

* Imprisoned under Gaddafi for eight years

* Background in corrosion protection

By Marie-Louise Gumuchian and Ali Shuaib

TRIPOLI, Nov 20 (Reuters) - Libya's new oil minister, once imprisoned under Muammar Gaddafi, is relatively unknown in the industry but brings with him technical expertise to take charge of the OPEC member's economic lifeline after it was restored to pre-war levels.

Abdelbari al-Arusi, 51, faces tough tasks ahead: improving security as plans to train former rebel fighters, now guarding oil installations, take hold, dealing with calls for more regional authority in the oil-rich east and threats of strikes.

Arusi studied chemical engineering before earning a masters and doctorate in corrosion protection in Britain. He worked at Libya's Sirte Oil for 16 years, an engineer in the field of corrosion at the Marsa El-Brega terminal in the east.

Arusi later expanded his responsibilities to inspection, budgets, training as well submitting technical proposals to the country's top oil body, the National Oil Corporation (NOC).

From the western town of Zawiyah, he joins the ministry from Libya's Green Holding Company, where he was an executive since the end of last year.

He takes over from Abdulrahman Ben Yazza who oversaw output restored to around pre-war levels of 1.6 million barrels per day after a virtual standstill during the 2011 war that ousted Gaddafi. Libya is now aiming for 1.72 million bpd by end-March.

"This is a big responsibility. We will try our best to push Libya to its new future," Arusi told Reuters after he was sworn in as minister at a government handover ceremony last week.

"Right now (in the oil sector) the target is to maintain the production rate and increase that next year."

In 1998, Arusi was arrested for being part of the then underground Muslim Brotherhood movement and sent to Tripoli's notorious Abu Salim prison; he was in jail for eight years.

He is said to have later worked at UK-based oil services company Tecnica in Libya and then Taknia engineering company, where he looked after engineering projects and corrosion solutions at a number of companies.

"He was very good on both the technical and administrative side of the job," a former colleague at Sirte Oil said.

"He was very active and well known for his attention to the training programs and development."

A senior NOC source, who did not know Arusi personally, said: "I have been told that he is a good, honest man."

POLITICALLY ACCEPTABLE

Some however have questioned Arusi's credentials to take charge of a key sector for Africa's third biggest oil producer. Ben Yazza worked extensively in Libya's oil industry and abroad.

Some members of the national congress, which approved the government, say they still have doubts over his appointment.

"There are some objections he does not have much exploration and production experience but it is too early to say how he will do," a Libyan oil industry source said. "He should be given a chance. He needs to be a good, strong decision-maker."

Analysts say the choice of minister had to be politically acceptable in a country where regional rivalries are rife and where the two biggest parties in the national assembly are a liberal coalition and the Muslim Brotherhood's political wing.

Both wanted ministries in the interim government that will govern until elections after a constitution is drafted.

"Getting the balance right was the primary thing," Charles Gurdon, managing director of Menas Associates, said.

"If his appointment means that there will be greater political stability, the situation will settle down quicker - I think that is more important to the international oil companies than whether or not he has lots of experience or is well known."

Under Ben Yazza, there has been some continuity in oil sector policy, helped by the continuity in personnel, except for a few high level changes. Deputy Oil Minister Omar Shakmak will stay in his position for now.

While the interim nature of the government means major new awards are still unlikely, there are hopes some upgrade projects could be approved where investors are looking to expand.

Ensuring foreign companies stay long-term in Libya is also a priority as analysts say a number of discoveries elsewhere in Africa may limit enthusiasm for its future deals.

Until late 2004, Libya's unexplored territory had been off-limits for decades because of U.S. sanctions. In its most recent bidding round in 2005, when that land opened up and a scramble for acreage ensued, companies accepted some of the industry's tightest exploration and production deals.

Fierce competition meant returns were narrower, and the results of initial efforts to find oil have been disappointing.

"Companies are going to be considering whether or not to stay in Libya," Gurdon said. "I think that is the central issue facing the new oil minister." (Additional reporting by Ghaith Shennib; Writing by Marie-Louise Gumuchian, editing by William Hardy)