1st Quarter Business Review

CONTENTS
1 Market analysis ..................................................................................................................................... 2
2 Opportunities ........................................................................................................................................ 2
2.1 Trade ............................................................................................................................................. 2
2.1.1 Feasibility Analysis ................................................................................................................ 2
2.1.2 Typical Projects ..................................................................................................................... 2
2.1.3 Conclusion: ............................................................................................................................ 2
2.2 Contracting.................................................................................................................................... 3
2.2.1 Feasibility Analysis ................................................................................................................ 3
2.2.2 Typical Projects ..................................................................................................................... 3
2.2.3 Conclusion: ............................................................................................................................ 3
3 Conclusion ............................................................................................................................................. 4
3.1 proven Feasible projects are: ........................................................................................................ 4
3.2 proven Unfeasible projects ........................................................................................................... 4
3.3 to further Investigate .................................................................................................................... 4

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1 MARKET ANALYSIS
Oil & Gas market in Libya is:

- Developed market (since 1960s & 1970s);

- They used to be exposed to main international providers (North America & UK);
- 2011 upraise raised stability and security issues International providers became skeptical and
avoid contracting Libyan contractors
- Market isn’t used to Tunisian Subcontractors

2 OPPORTUNITIES
- Bridging the gap between Libyan contractors & International Suppliers
- Bridging the gap between Libyan contractors & Tunisian Subcontractors

Two main Business opportunity types are investigated: Trade & contracting

2.1 TRADE
- Original Trade Process

Libyan
Int. Supplier
Contractor
- Proposed Trade Process

Libyan
Int. Supplier GITS
Contractor

2.1.1 Feasibility Analysis

- Gap between international suppliers and Libyan contractors is the combination of
o Lack of International suppliers’ trust in Libyan payments
o Lack of Liquidity in hand of Libyan buyers
- To bridge the gap GITS needs to offer financial guarantee acceptable for the supplier using the
affordable Libyan contractor guarantee.
- Once Ok, Acceptability of GITS fees to Libyan contractors?

2.1.2 Typical Projects

- Manifold (Flaretech and PetroTechna), Broadcasting Van and Substation (Actif);

2.1.3 Conclusion:
- For low amount projects Its Feasible for GITS to offer financial guarantee; acceptability of fees
required (typically 30% - to be verified-) need to be verified yet;
- For high amount projects, GITS can not offer required financial guarantees;

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2.2 CONTRACTING
- Original Contracting Process

Libyan
Int. Supplier
Contractor
- Proposed Trade Process

Libyan
Tun. Supplier GITS
Contractor

2.2.1 Feasibility Analysis

- Gap between international suppliers and Libyan contractors is mainly due to the high fees of
international suppliers
- Capacity of [GITS + Tunisian Supplier] to replace international Supplier
o Capacity of GITS to mobilize Tunisian Supplier?
o Capacity of GITS to mobilize Project Management Expertise?
o Capacity of GITS to offer financial guarantee to Tunisian Supplier using the Libyan
contractor guarantee?
o Capacity of GITS to bridge Tunisian Supplier’s unit price offer with Libyan Lumpsum
solution request?
- Once Ok, Acceptability of GITS fees & bridging risks provision to Libyan contractors?

2.2.2 Typical Projects

- Water treatment
- Emission Testo
- Tubruk Jetty
- Lighting Sarir Field
- PipeLine
- Tanks

2.2.3 Conclusion:
- Engineering Study projects are feasible
- Construction projects:
o Need to bridge between Tunisian contractors offering per unit price and Libyan
contractors requesting lumpsum solution;
o Margins sufficiency to pay that bridging need to be verified
o Tunisian contractors aren’t used to cooperate in a partnership philosophy hindering
optimization efforts
o Acceptability of back to back financial terms need to be verified
o Acceptability of GITS fees to Libyan Contractor need to be verified

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3 CONCLUSION

3.1 PROVEN FEASIBLE PROJECTS ARE:

- Low amount trade projects (given good financial state of GITS)
- Engineering study projects

3.2 PROVEN UNFEASIBLE PROJECTS

- High amount trade projects Engineering study projects

3.3 TO FURTHER INVESTIGATE

construction projects feasibility needs to be verified, mainly
- possibility of bridging the gap between Tunisian unit price offers and Libyan lumpsum requests
- sufficiency of GITS margin to pay for the bridging and managing inherent risks
- Acceptability of back to back payment terms

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