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

A Middle Eastern construction company, Al-Kharafi Group, has been granted permission by a Paris court to seize assets from Libya's state oil company, the National Oil Corporation (NOC), to recover nearly $1 billion owed due to the cancellation of a tourist resort project. The dispute began in 2006 when Al-Kharafi signed a deal with Libya's tourism authority to build a five-star resort in an area east of Tripoli.

Construction was expected to last seven and a half years and cost around $130 million, but the company faced numerous legal challenges and was eventually forced to abandon the project in 2010. Al-Kharafi subsequently sought compensation from Libya, winning a $900 million award in 2013. The Libyan government subsequently blocked efforts to seize assets, including an Airbus A340 owned by Qaddafi, and a luxury jet owned by the Libyan Investment Authority, which Al-Kharafi attempted to seize.

In 2022, a French court ruled that NOC, an extension of the Libyan state, could be forced to relinquish assets to satisfy the debt. Al-Kharafi was subsequently approved to seize NOC's stake in its joint venture with French energy company TotalEnergies. The debt, after accounting for interest, now stands at $960.2 million.