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When Saadi Qaddafi, the soccer-mad son of Libyan President Muammar Qaddafi, first let slip that Libya wanted to sell its international downstream oil business, Tamoil, he hardly gave the company a ringing endorsement. "The reason to sell is very specific," he told an interviewer. "The fact is there is a problem in Tamoil, or Libya doesn't want Tamoil, so it's just to escape," (EC May13'05,p4 ).
That was in April 2005. Bankers describe what has followed as the most "flaky," disorganized and tortuous sales process they can remember. So when Shokri Ghanem, head of Libya's National Oil Corp., said last week that the sale of a 60% stake was at a "very advanced" stage, few held their breath, since Ghanem also conceded that the government might yet decide to hang on to the company.
Kazakhstan's national oil firm, Kazmunaigas, which is bidding in partnership with a Dubai-based investment group, is regarded as the lead contender. Indeed, in theory, Kazmunaigas has already won, having submitted the highest bid in a formal auction last October. But the Libyans, in a break with deal protocol, didn't accept the results and reopened negotiations. Apparently, the top bid was below the $3 billion they...