Middle East firm allowed to seize Libya's oil company assets over $1bn debt

A Middle Eastern construction firm, Al-Kharafi Group, has been granted permission by a Paris court to seize assets from Libya's state oil company, National Oil Corporation (NOC), in order to recover nearly $1 billion in debt stemming from a cancelled tourist resort project. The ruling stems from a construction project that was never completed, despite initial agreements signed by Al-Kharafi and Libya's tourism authority in 2006.

The total estimated cost of the project was around $130 million, with construction expected to take seven and a half years. However, the project came to a halt when several Libyan public bodies claimed ownership of the land and Al-Kharafi was forced to leave. The company was then offered an alternative site, which it refused. Following this, in 2010, the Libyan government terminated the construction project's license.

Al-Kharafi has continuously sought to recover what it believes it is owed by targeting assets owned by the Libyan government, including a luxury jet once used by former Libyan leader Muammar Qaddafi. Despite attempts to seize assets belonging to the Libyan Investment Authority (LIA), those attempts were unsuccessful due to sanctions on the fund.

In 2022, a French court ruled that NOC, a subsidiary of TotalEnergies, could be held liable for the debt, allowing Al-Kharafi to seize its stake in joint ventures with the French company.