January 23, 2009 / 5:58 PM / 10 years ago

Spanish king pushes deals in post-sanctions Libya

TRIPOLI, Jan 23 (Reuters) - Spain’s King Juan Carlos visited Libya on Friday with business leaders seeking deals in the north African country opening up after years of sanctions.

Tripoli has hosted a string of European leaders since Libya renounced banned weapons programmes and agreed to settle compensation claims for bombings and attacks for which it was blamed by the West.

Growing oil income has given Libya the resources to rebuild roads, railways, ports, industrial areas, schools and hospitals that fell into disrepair during its long diplomatic isolation.

Spain’s government maintained links with Libya even when Tripoli’s relations with the West reached their low point and will be hoping for an important role in the desert country’s reconstruction effort.

Italian, Russian and Chinese firms have mopped up some of the biggest contracts to date but Spain’s government has estimated that joint business between Spanish and Libyan firms should amount to more than $17 billion.

New deals might be announced during the king’s two-day trip, his first official visit to Libya in a 33-year reign, a Spanish foreign ministry spokesman said. Gaddafi visited Spain in 2007.

“The first priority is to get to know each other better and decide the areas where Spain can invest,” the spokesman said. “But we also expect some matters to be settled right now.”

The Spanish king was due to dine with Gaddafi at the Libyan leader’s official residence in Tripoli later on Friday. He was accompanied by executives of 15 Spanish companies involved in oil and gas, environment and construction.

Among them is Antonio Brufau, Chairman of Spanish oil company Repsol YPF (REP.MC) which has oil exploration and production activities in Libya.

Brufau may ask for reassurances from Libyan officials after Gaddafi said this week his country and other oil exporters were looking into nationalising foreign firms due to low oil prices.

Repsol, which plans to expand its Libyan production to around 400,000 barrels per day by next year from around 265,000 barrels a year ago, said on Thursday it saw no real possibility of Libya nationalising its oil sector. (Reporting by Salah Sarrar; writing by Tom Pfeiffer; editing by Philippa Fletcher)

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