Libya's embargo on Switzerland could end up shuttering its own major offshore and refining projects involving companies that have relocated to the Alpine state for tax reasons, analysts said on Thursday. It is likely that Libyan authorities did not realise their energy project partners such as Transocean Ltd, Noble Corp and Foster Wheeler were now based in Switzerland and would be caught up in the trade ban announced last month, said Samuel Csizuk of IHS Global Insight. "There are high-profile and important projects on the line here. I don't think they realised that when they called the embargo," he said. "They probably thought that their interests were divested from Switzerland and that by calling an embargo their interests wouldn't suffer."
Transocean, which moved to Switzerland from the Cayman Islands and will list on the Swiss stock exchange this month , said late on Tuesday that Libya's trade ban could prevent Russia's Gazprom from deploying a Transocean rig to drill in Libyan waters.
Other Swiss newcomers including Noble, another offshore rig contractor that had also been based in the Caymans, and formerly Bermuda-domiciled Foster Wheeler are now trying to determine their exposure to the Libyan-Swiss dispute. Tripoli has not said how the Libyan energy projects would be affected.
Foster Wheeler, an engineering and contracting group, does not own assets in Libya but is looking into whether any of its design projects could be affected by the Swiss-Libyan tiff.
A spokesman for Exxon Mobil Corp, which is one year into a three-year contract with Noble for a rig off Libya's coast, said the oil giant does not comment on diplomatic or political issues as a matter of practice. But Noble said it had seen no concrete impact of the embargo so far. "Our rig continues normal operations at present," the company said.
Switzerland has worked hard to transform itself into an energy and commodities centre, offering very low tax rates to companies and trading houses relocating to the small country, which prides itself on discretion.
"I just think the people around Gaddafi himself didn't reflect on this trend of companies relocating to Switzerland," Ciszuk said, stressing the trade embargo was unlikely to serve as a disincentive to companies considering a Swiss address. "It just shows how problematic doing business in Libya is and how easy it is to get on the wrong side of the regime," he said. "It shows the political risk of doing business in Libya and not the risk of doing business in Switzerland."
| That whole jihad thingy hasn't been working well for this generation. Not like the old days when the jihadis had more effective tactics than the crusaders. |