US banks barred from operating in Libya for the last two decades want to resume business with the North African state as it opens up after sanctions.

At least one bank, Citibank, says it is considering focusing on trade and project finance while other major US banks are planning exploratory missions to Libya.

Destination Tripoli

According to Michel Accad, Citibank's head of the Middle East and North Africa division in Cairo, a team that visited the country after many US sanctions were lifted in late April was drawing up a business plan. He said they were at an early stage.

A Libyan banker in Tripoli said Citibank was among several US banks that had sent teams to discuss opportunities. He named others as American Express Bank and J P Morgan.

Exploratory missions

An American Express Bank official in London said staff in correspondent banking in Cairo had been on an exploratory trip to see if there was any business to re-establish but he did not elaborate.

J P Morgan has made no comment on Libyan prospects but it is believed to be consulting North African experts with a view to planning exploratory visits to Libya later this year.

L/C confirmation

"At this stage, we are not looking for a presence. We are looking for correspondent-type business or investment banking advisory for project finance and things like that," Accad said.

The correspondent banking would involve trade business such as confirming letters of credit, while project finance business would focus on the oil and gas sector he added.

Renewed interest

Apart from banks, US oil companies are the other major constituency now very interested in returning to Libya after a long period of banishment from one of the world's richest oil provinces.

The easing of US sanctions this year follows the lifting of UN sanctions last year after Tripoli took responsibility for the 1988 Lockerbie plane bombing. Some U S sanctions were lifted in December 2003 after Libya agreed to scrap programmes to develop weapons of mass destruction.

In common with many of the US companies now exploring Libyan opportunities, Citibank had business dealings with Libya before sanctions were imposed. In the bank's case, it did not have a presence in the country.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.