“The macroeconomic outlook remains uncertain, but … we
expect to deliver another year of underlying revenue and profit
growth in 2012,” Chief Executive Erik Engstrom said in a
statement on Thursday.

The company said it would maintain a “relentless focus on
process efficiency” in the coming year to help it deliver that
growth although Engstrom declined to say during a conference
call with reporters whether that would involve job cuts.

The publisher of scientific, business and academic
information said adjusted pretax profit rose 9 percent to 1.39
billion pounds ($2.18 billion) in 2011, slightly ahead of the
1.37 billion pound average of 23 analysts’ forecasts compiled by
the company.

Revenue at the group, which also runs the world’s largest
exhibition business, dipped 1 percent to 6.0 billion pounds
although it was flat once the impact of foreign exchange
fluctuations had been stripped out and underlying growth was 2
percent.

Steady growth at more economically resilient parts of its
business such as academic publishing and events are also helping
offset subdued spending by legal clients and uncertainty over
government spending.

It’s main Elsevier business, which provides science and
health information and accounts for 47 percent of group profit,
reported underlying operating profit growth of 4 percent and
predicted “continued modest underlying revenue growth” in 2012.

Its LexisNexis Risk Solutions business reported 12 percent
profit growth and predicted good revenue growth in insurance and
business services but continued tough conditions among
government clients.

The LexisNexis Legal & Professional division, which competes
with Thomson Reuters’ Westlaw, said it had
returned to revenue growth last year, recording a 1 percent rise
after a 2 percent drop in 2010.

“Legal markets remain stable but subdued, limiting revenue
and margin growth potential in the short term,” the group
cautioned.

Shares in Reed were up 0.8 percent at 538.5 pence in London
by 1024 GMT, outperforming a 0.7 percent weaker FTSE 100 index
.

Analysts at Numis described the results as “slightly ahead
of consensus” and said the company’s outlook statement was
consistent with their expectations, prompting them to leave
their 2012 earnings estimates unchanged.

“We view the results and outlook statement as solid and
retain our “add” recommendation and (share) target price of 576
pence,” they wrote in a note to clients.

Analysts at UBS said the results should reassure investors.

“The portfolio looks in robust shape and we believe the
shares should continue to see gradual re-rating as the company
move towards delivering the double-digit EPS growth it has in
the past,” they wrote.

Engstrom told reporters that the group had no plans to sell
any of its main five operating businesses but that it would
continue making small disposals within all divisions as it has
done over the last two years.

In terms of growth, Engstrom said the focus remained on
organic growth supplemented by small acquisitions.

The mudslinging over who decided the Costa Concordia should sail within 150 metres of the shoreline of an Italian island in a manoeuvre known as a “salute” to show the ship off has exposed wider concerns over how such vast ships should be controlled and how safe they really are.

“During the past two decades, cruise lines have maintained the best safety record in the travel industry,” the European Cruise Council reassured holidaymakers on January 14 in response to the capsizing of the Costa Concordia in which at least 16 people died.

Research by Reuters has revealed, however, that patchy safety data and poor accident reporting standards make it difficult to verify how safe the industry really is and impossible for members of the public to easily compare the relative safety standards of different operators.

The lack of a comprehensive, publicly available database of shipping accidents is just one symptom of a loosely regulated industry where international rules under the auspices of the United Nations are wide open to interpretation by national governments, operators and ship captains.

The reassurances given to cruise ship passengers in a second statement from the European Cruise Council on January 16 that “all our member lines are subject to the highest safety standards around the world according to international maritime requirements” may raise some eyebrows.

The blame game between the captain and ship operator Costa Cruises – a unit of U.S. giant Carnival (CCL.N: Quote, Profile, Research, Stock Buzz) (CCL.L: Quote, Profile, Research, Stock Buzz) – over whose fault it was that he sailed so close to shore as to run aground and passenger criticism of emergency procedures have prompted questions over industry safety standards, particularly as there would have been many more casualties had the ship gone down on the high seas.

Adding to the growing debate, Franco Gabrielli – head of Italy’s Civil Protection authority which is coordinating the rescue operations – said over the weekend that a number of unregistered passengers may have been on board. Costa denied there were any stowaways on board.

Highlighting how open to interpretation international shipping rules are, Chapter 5 of the International Convention for the Safety of Life at Sea agreed in 1974 requires that member states ensure that “from the point of view of safety of life at sea, all ships shall be sufficiently and efficiently manned”. There are no agreed minimum staffing levels.

The U.N.-affiliated International Maritime Organisation IMO.L did adopt additional guidelines for “minimum safe manning” in November 2011 but the principles are, in its own words, broad ones and put the onus on governments under whose flag the ships are sailing.

FULL OF HOLES

Rules on reporting accidents are also short on enforceable specifics.

The 1974 convention, for instance, only required governments to supply the IMO with “pertinent findings” from investigations in the wake of accidents and undertook that any reports or recommendations based on such filings would not disclose the identity or nationality of the ships concerned or apportion blame for any incident.

Guidelines on investigating and reporting casualties have been amended over the years but there’s still plenty of wiggle room. Under resolutions adopted in 1999, operators were told only that reports into incidents should be “distributed to relevant parties involved and should preferably be made public” while pooled information on casualties was to be made available in an electronic format to governments but not to the general public.

Even under revised harmonised reporting procedures published in a Maritime Safety Committee circular dated December 18, 2008, governments are asked only to supply the IMO with “pertinent information” concerning the findings of investigations. The circular is characterised by words such as “requested”, “urged” and “invited”.

The result is that even the IMO’s own database of Marine Casualties and Incidents is incomplete.

Costa Concordia owner Carnival, for instance, outlines in its 2010 sustainability report details of an accident in which another member of the Costa Cruises fleet – the Costa Europa – collided with a pier while docking in the port of Sharm el-Sheikh, Egypt, causing a hole in the ship, killing three members of the crew and injuring four passengers.

This accident does not appear on the IMO database. Nor, in fact, does another incident outlined in the same Carnival report when on July 12, 2010 a diver inspecting its Holland America Line cruise ship Noordam drowned.

The most recent Costa Concordia incident off the coast of Italy is recorded on the IMO database. So too is a near miss – a so-called close-quarter situation – involving the Costa Atlantica, which in 2008 came too close to the Panamanian registered car carrier Grand Neptune in the Dover Strait between Britain and France. The cruise ship was crossing a traffic separation zone which is shipping’s answer to a one-way street and designed to reduce the chances of collisions in busy shipping lanes.

UNREPORTED

The IMO database lists 38 incidents involving passenger ships since 2005 in which more than 60 people died. The incidents, which include ferries, range in severity from momentary groundings with little damage and no injuries to the loss of the ship and several lives. What data there are, show Carnival as owner of 12 of the 38 ships to get into trouble while Royal Caribbean International was operator of three, as was Fred Olsen. The others have not been identified or belonged to smaller, local cruise or ferry companies.

A recent report by industry analysts Cruise Market Watch showed Carnival had a 49.2 percent share of the global cruise market followed by Royal Caribbean with 23.8 percent.

For the period since 2000, the IMO database has recorded just under 300 incidents involving passenger-carrying vessels ranging from near misses to sinkings although prior to 2005 the details available in relation to any given accident are often patchy.

Data compiled by sociologist Professor Ross Klein of Memorial University Newfoundland, who in 2007 testified before a U.S. congressional hearing into cruise safety but whose findings have often been disputed by the industry, indicates the rate of reportable accidents could be much higher, however.

Klein’s data, which he posts on his website www.cruisejunkie.com, suggest that for cruise ships alone there have been 368 disabling events such as fires, 174 persons overboard, 75 groundings and 27 sunken ships, giving a total of 644 incidents since 2000. That’s more than twice what the IMO data shows for cruise ships, ferries and other passenger vessels combined.

“No one keeps track of it and it’s not really reported anywhere,” Klein told Reuters. “I scour the world media every morning and look for what’s been reported anywhere. I receive about 3,500 hits on my website every day, a lot of them are passengers and crew members and they send me information.”

A presentation to The International Union of Marine Insurance’s 2011 conference in Paris by Paul Hill, of marine consultancy Braemar (Incorporating The Salvage Association), indicated that the passenger shipping industry may be more accident prone than it cares to admit.

A table in Hill’s presentation shows that passenger ships, including ferries, account for 9.9 percent of casualties at sea and just 6.3 percent of the global shipping fleet, meaning statistically they have the highest casualty rates of any type of shipping. Passenger shipping also accounts for 40 percent of the total cost of casualties at sea, the presentation shows.

Hill declined to speak to Reuters about his report’s findings.

POWERLESS

The lack of global rules means there is little to stand in the way of the considerable autonomy that ships’ captains have accumulated over the centuries and that there is nothing on a global level to prevent practices such as so-called showboating where ships sail close to shore to give tourists a better view.

Some inhabitants of the island of Giglio where the Costa Concordia now lies on its side, say they had been told beforehand that Captain Schettino would perform a salute which took the ship within 150 metres of the shore. Schettino is accused by prosecutors of multiple manslaughter, causing a shipwreck and abandoning ship before all the passengers were evacuated.

“There are no national or international rules that forbid ships steering close to shore,” a spokesman for Italy’s Coast Guard department which deals with maritime security told Reuters. “It’s not that we knew about and allowed these salutes as you might suppose, it’s that you can’t really stop a ship from approaching within a minimum distance of the shore for tourism purposes.”

The practice may have become common along the Italian coast. Enrico Scerni, former president of the Genoa-based RINA ship classification organisation, has said that it is difficult to believe Carnival’s Costa Cruises division was unaware that captains often went close to Giglio to salute the island and give passengers a closer view. Schettino said Costa had told him to perform the manoeuvre but the company said it was unaware of risky approaches so close to the shore.

Many in the shipping industry have rejected the idea that “showboating” has become widespread, saying that captains should only depart from an agreed course when necessary.

“Sailing close to shore – for whatever reason other than for the safety of life, and especially not for entertaining passengers, crew or people ashore – is certainly not commonplace,” said John Dalby, a former oil tanker captain who now runs Marine Risk Management. “The vast majority of masters, officers and owners are far too responsible to indulge in such potentially dangerous practice … Neither do I know of any owners – including Carnival – who would advocate, propose, suggest or order such reckless, irresponsible actions.”

Tracking data from shipping publication Lloyd’s List has indicated not only that the Costa Concordia had already sailed within 230 metres of Giglio in August but also that it was the only large cruise vessel to sail so close to the island in the last six months, with others giving it a relatively wide birth as they sailed through the strait separating it from the mainland.

“The question is who authorised the order to go that close,” said Mike Smith, a retired master mariner with 45 ship commands and over 34 years experience including as captain of a cruise liner. “There is always a temptation to get closer in to keep the passengers happy which is what the company wants the ship to do provided it remains safe.”

He noted, however, that typically captains would err comfortably on the side of caution while others pointed out that for all the disagreements over how widespread or tacitly approved showboating had become, the high degree of autonomy enjoyed by captains brings with it a high degree of responsibility.

“Command of any ship means that the captain is ultimately responsible for all aspects of the ship’s operations,” said one senior shipping official who asked not to be named. “This is a necessary approach developed over hundreds of years of maritime trade and operations. The master operates autonomously within guidelines provided by the company, the flag and international regulation.”

NO BLACK BOX

The official said the need for a ship’s commander to make on the spot decisions meant it was important not to compare procedures with those of the airline industry. But for others the Costa Concordia affair has highlighted glaring differences.

“What needs to be done is the designated person ashore needs to be monitoring these ships all the time, and if they go off course they should get on the radio and ask ‘why are you off course?’,” said one senior marine underwriter at the Lloyd’s of London insurance market.

“With aircraft, if you go 2,000 feet too high or too low, you have air traffic control on the radio immediately saying ‘you’re off course, get on course’. Maybe what they’ll come up with is the equivalent of air traffic control for passenger ships.”

Under IMO rules data recorders, known as black boxes, have been mandatory aboard passenger ships since 2004 but there is a get-out clause exempting ships built before July 2002 where it can be demonstrated that fitting one alongside existing equipment would be unreasonable or impracticable.

By contrast the flight data recorders have been widespread since the 1960s.

In the case of the Costa Concordia, Schettino has been quoted in the Italian press as saying the black box had been broken for two weeks and he had asked for it to be repaired, in vain.

The slow-moving nature of consensus-based global regulation means there is unlikely to be a revolution in the industry overnight but things are already starting to move on a local level.

CODE WORDS

The U.S. Congress, which over the years has resisted efforts to more closely regulate the cruise line industry, last week launched an investigation of industry safety practices with a hearing due next month, while Italian environmentalists and some politicians are demanding that big cruise ships be banned from passing too close to islands or shorelines, or entering environmentally delicate areas such as the Venice lagoon.

Vessel design changes may also follow the accident which has revealed how the problem of getting thousands of people off a cruise ship and into lifeboats quickly has still not been resolved 100 years after the Titanic disaster.

In some areas of ship safety, there have been suggestions that things have gone backwards in recent years as the cruise ship industry seeks to strike a balance between pressure to constantly refresh fleets with ever smarter vessels and making money. Most of the Costa Concordia’s 1,023-strong crew were there to run the bars, swimming pools, theatres and casino rather than qualified seamen.

While entertainment and hospitality staff would have had training in emergency procedures, there have been questions over the quality of that training given that these days most of them will have been agency staff who came from around 40 different countries.

“On our ship it was really, really strict,” one former waitress with Cunard prior to its takeover by Carnival in the 1990s told Reuters. “We had boat drill every single day, we practiced tying on people’s lifejackets every single day. We had all these code words so passengers wouldn’t panic – “niagara” was a flood, “starlight” meant somebody had died.”

Some on the Costa Concordia have said they did not get a full safety briefing within 24 hours of boarding while a Reuters reporter who cruised on a sister ship of the Concordia last summer went nearly 36 hours without a briefing after boarding.

Carnival has defended its compliance with rules on safety drills but here, once again, there are grey areas. The Standards of Training, Certification and Watchkeeping Convention provides global guidelines on safety training for crew which were most recently amended in 2010 but the IMO has little authority to enforce those standards.

There has also been much debate around Schettino’s decision to leave the ship before it had been evacuated but here too there are no rules governing a captain’s behaviour.

“There is no basis in international law for the notion that the captain goes down with the ship, or that he is the last to leave the ship,” said Vice Admiral Sir Alan Massey, chief executive of the UK Maritime and Coastguard Agency and a former senior Royal Navy officer. “There is more myth than reality to that notion.”

Massey said that in certain circumstances, such as when communications systems go down on a stricken ship, it may be better for the captain to leave and to direct operations from another vessel.

The IMO has left the door open to reform, with Secretary-General Koji Sekimizu saying his organisation should seriously consider the lessons to be learnt.

“The frightening thing is how quickly the ship went on its side. If that had been out to sea there would have been a massive loss of life,” the marine insurance underwriter said. “It’s very similar to the Titanic disaster. The Titanic hit an iceberg and opened up like a can of sardines … They will look at the disaster and there may be some changes, presumably vessel design changes.”

(Additional reporting by Myles Neligan, Estelle Shirbon and Jonathan Saul in London; Ben Berkowitz in Boston; and Antonella Cinelli in Rome; Editing by Giles Elgood)

Tidjane Thiam, charged with pulling together the report, believes world leaders will seize on a plan to spur infrastructure investment in developing countries that includes reform of The World Bank and its regional counterparts but does not tap crisis-weary taxpayers.

“We need growth. We’re not going to get out of this by just cutting deficits,” the Franco-African engineer who runs Britain’s biggest insurer Prudential Plc told Reuters before heading to the Cannes summit.

“At one point it was important to convince everybody we needed to cut deficits and we got there, and now everybody is really thinking ‘what’s the positive message and how do we get the public out of just thinking about cuts and cuts and cuts?’”

Thiam, a former Ivory Coast planning and development minister, says the G20 High Level Panel for Infrastructure Investment which he chairs has at least part of the answer.

The idea is a simple and symbiotic one.

Rich nations may not be generating much new wealth at the moment but they are sitting on trillions of dollars of accumulated wealth that is earning little in the way of returns and not doing very much to foster a global economic recovery.

“There’s no yield in this world, no yield anywhere, and there’s not going to be any for quite a while,” Thiam said in an interview at his London office last week.

Spending on infrastructure in poorer countries does, however, have a history of generating big returns. It also helps unlock their growth potential, thereby increasing profitability still further and creating a virtuous investment cycle.

Remove a large part of the risk element and you have the recipe for a highly profitable, mutually beneficial relationship between the world’s most and least developed economies, Thiam and his fellow panel members believe.

Other members of the 17-member panel, due to publish its report at the summit in the south of France this week, include Sudanese telecoms billionaire Mo Ibrahim, South Africa’s Mac Maharaj who was imprisoned on Robben Island with Nelson Mandela, and Nicholas Moore, Chief Executive of Australia’s top investment bank Macquarie Group.

Long-term infrastructure investments may not appeal to those looking to make a quick buck, but hiving off the risk should attract those with the serious money, namely the $30 trillion global pension industry in which Thiam’s company is a major player and Asian or Middle Eastern sovereign wealth funds struggling to find good homes for their cash in a low growth, low interest rate world.

“I understand developing infrastructure in the third world, I’ve done it, I’ve built literally thousands of kilometers of roads in Ivory Coast,” says Thiam, turning to gaze across the London skyline. “Nowadays at Prudential I am the person in charge of taking people’s savings and investing them so that I can pay their pensions in 2030 … Finally I found a way to reconcile my two passions.”

CHINESE APPETITE

Finding new growth areas is a pressing concern for Thiam given the pensions industry is sitting on a ticking demographic time bomb in the west where populations are aging rapidly and people not saving enough for retirement. As for sovereign wealth funds, long-term returns from infrastructure projects suit their needs perfectly.

“What are the Middle Eastern sovereign wealth funds thinking about every day? ‘What do we do when we run out of oil?’ So this is exactly what they need,” Thiam says.

Yahya Alyahya, a Saudi national and Chief executive of Gulf International Bank, is a fellow member of the panel Thiam is chairing, as is Jin Liqun, Chairman of the Board of Supervisors of China Investment Corporation.

“He (Liqun) has been very, very helpful and very positive. They’re desperate to find good investment opportunities that are relatively clean and well-structured,” says Thiam.

He points to Brookings Institution research published in August showing that returns on investments in developing countries are “super-normally high” at 30 to 40 percent for telecommunications, 40 percent for electricity generation and 80 percent for roads.

Ensuring potential investments are safe, simple and transparent enough for long-term, relatively risk averse investors will be the main obstacle. The Brookings Institution, whose report urges the G20 to act in this area, describes hurdles to financing as enormous but Thiam believes they can be overcome.

“Big projects have such a bad name in the third world. It’s full of white elephants,” he says. “You need credible projects, you need something to invest in that people can see and touch and have a view on.”

FACEBOOK RETURNS

The way to achieve this, Thiam believes, is to get the World Bank and other regional development banks to move away from the expensive business of funding major projects themselves.

Instead their precious resources should be used to do what fund managers cannot, such as early feasibility studies and design preparation on the basis that $1 dollar invested in preparing projects triggers $10 of investment. It’s what he calls “priming the pump.”

Secondly, the development banks should provide guarantees to cover losses, giving investors the confidence they need to stump up most of the funds, which Thiam believes is a much better use of development bank balance sheets.

“Why can’t I invest in an infrastructure project? It’s about credit rating. I cannot put pensioners’ money in non-investment grade paper.”

Thiam says he has been in very close dialogue with the World Bank and other development banks around the world and found them to be supportive.

He stresses that he is not against public investment but notes that an estimated $1.2 trillion a year needs to be spent on infrastructure in the developing world, of which about $90 billion is needed in sub-Saharan Africa alone.

The need for private sector investment will become all the more acute as western governments cut back on spending and cash-strapped banks pull down the shutters on project finance.

Much of what Thiam is proposing is not revolutionary. As a cabinet minister in Ivory Coast in the 1990s he lined up investors and the army pension fund to finance projects such as a new toll bridge, a power plant, and refurbishment of Abidjan’s airport.

“That was my proudest achievement, convincing international financiers to put private money into an urban toll bridge in Africa,” says the 49-year-old.

Infrastructure generally offers great returns, he believes, but the developing world in particular is hard to beat.

“The growth curves are just unbelievable. Anything grows at 20 percent per annum which means it will be 10 times bigger in 10 years. You don’t get that in the West unless you are Facebook.”

PEACE DIVIDEND

The big change he wants to drive through is to make it safer and easier to invest in poorer nations by institutionalizing what is often already being done on a local, project-by-project basis.

One way of spreading risk and improving access would be for development banks, governments and fund managers to create Special Purpose Vehicles (SPVs) grouping together investments in dozens of projects across the world.

“So it’s really having a push. Not doing it in one country but doing it in 40, 50, 60 countries at the same time and then using the balance sheets of the development banks, of the World Bank, to provide guarantees of the SPVs.”

They might even be something that private investors who want to give their portfolios a philanthropic flavor could invest in.

To help focus minds, Thiam and his panel will ask G20 heads of government to back an initial list of 11 projects worth “a few hundred billions of dollars,” spread across Africa, the Middle East, Asia and Latin America, including a transnational highway, hydro electricity and a gas pipeline.

“A lot of these projects need political commitment,” says Thiam. “In Asia if something is endorsed by China, India, Indonesia and Singapore, it has more chances of happening.”

Thiam, the first black chief executive of a British blue-chip company, also speaks animatedly about the humanitarian and peace dividends of such investment, occasionally bringing himself up short for getting carried away.

Something as simple as a street light, allowing children to gather and do their homework after dark, can be transformational while transport networks help overcome estrangement and the prejudice it breeds.

“As soon as people start moving, what you observe everywhere is that actually they get to know each other and they tend to massacre each other less,” says Thiam. “The reality is those projects, they bring countries together. They have to negotiate, they have to sit down. There’s no better glue than money.” ($1 = 0.619 British Pounds)

(Reporting by Paul Hoskins; Editing by Andrew Callus)

Europe’s second biggest tour operator still has a lot to do after losing three quarters of its market value since mid-January, analysts cautioned, noting that it may yet have to tap shareholders for fresh funds.

Thomas Cook said on Friday it had amended the terms of existing bank facilities and agreed a new 100 million pounds short-term credit line to tide it over during December when trading is traditionally quiet.

“We are pleased to have the full support of our banking group in amending the financial covenants so as to provide greater financial flexibility, particularly around the seasonal cash low point at the end of December,” Chief Financial Officer Paul Hollingworth said in a statement.

Shares in the group were up 18 percent at 53.7 pence by 0905 GMT. The surge took the stock to levels last seen in mid-August but left it well short of a year high of 206.8 pence.

Peel Hunt analyst Nick Batram said the deal had allayed fears Thomas Cook would ask shareholders for fresh funds and described the group as “one of the most interesting turnaround prospects in the sector” but pointed to Britain’s weak consumer environment as a major hurdle still facing the group.

“Focus will now return to the job of improving profitability against a backdrop of deteriorating consumer confidence,” Batram wrote in a note to clients. “Definitely a positive step forward, but there is still a lot of hard work ahead.”

Thomas Cook scrapped its dividend last month as part of efforts to cut its debt substantially over the next 2 to 3 years.

The company said that under the deal the terms of an existing 150 million pound loan and a 850 million pound credit facility maturing in May 2014 had been amended, setting less onerous caps on how much debt and debt-related charges it can carry relative to earnings.

In return for the easing in lending terms, Thomas Cook has agreed to restrictions on acquisitions, a prohibition on dividends and to use the proceeds from any disposals to reduce its loans.

The interest margin it pays on its borrowings will also increase by half a percentage point.

“It’s a positive development which addresses a widely-held investor concern,” Charles Stanley analyst Douglas McNeill wrote.

As well as needing to find a new chief executive, McNeill predicted that an exit from its Indian business and tapping shareholders for funds via a rights issue may also still be in the pipeline.

(Editing by Kate Holton and Mike Nesbit)

“SOS has the necessary long term permits and licences to
provide onshore and offshore oil field services in Libya as well
as the rights to own and operate oil and gas licences,” Heritage
said in a statement on Tuesday. “Through this acquisition
Heritage is exploring ways to gain access to key producing
fields and other licence opportunities in Libya.”

Reuters reported last month that Heritage had recruited John
Holmes, a highly decorated former SAS commando and retired
British Army Major General, to help it win oil field security
and maintenance work in return for a stake in Libya’s oil
production.

The company, which had previously declined to comment,
confirmed in Tuesday’s statement that it had established a base
in Benghazi and that it had been in talks with senior members of
Libya’s National Transitional Council (NTC).

“The dialogue with these parties continues through SOS with
Heritage exploring ways to assist the NTC and the state oil
companies rehabilitate certain of their existing fields and
recommence production,” Heritage said.

Heritage Oil’s Chief Executive and biggest shareholder Tony
Buckingham has a long history in Africa, building a company
valued at $1 billion that has been on the lookout for
acquisitions since selling its stakes in Ugandan wells in a
disputed $1.35 billion deal last year.

Buckingham, whose company also has operations in Iraq,
previously worked for private military contracting firm
Executive Outcomes, providing mercenary forces in Africa.

The British and French governments have moved fast to
facilitate business deals in return for the early backing they
gave to opponents of Muammar Gaddafi. But members of the NTC
have warned that, while British and French companies can expect
to play a key role in rebuilding Libya, months of political
uncertainty lies ahead with no immediate clarity as to who will
end up running the country.

(Editing by Myles Neligan)

“I would like to thank the British people and their government for their invaluable support,” Mahmud Nacua, a long-time Libyan exile and now charge d’affaires at the country’s embassy in London, told a private meeting of business people arranged by the British government.

“I can assure you that British businesses have a role to play and hope you will work with us to build the future Libya,” Nacua told the meeting, attended by about 100 executives and closed to media other than Reuters.

Stephen Green, a former head of bank HSBC and now Britain’s trade and investment minister, warned delegates they should take nothing for granted in their dealings with Libyans, however.

“They are not naive, they expect it to be profitable to us, but they’re not going to do us any favors. It will be competitive,” Green told delegates.

A white paper published by the Economist Intelligence Unit on Tuesday highlighted how stiff competition might be with South Korean, U.S., French and Italian firms all tipped as being well-placed if Libya can break with its past.

“If, as we expect, power is passed to an elected government staffed with able technocrats and supported by a wide range of interests … the opportunities will be substantial, and the business challenges confronting potential investors will be on a par with those commonly faced in fast-growing emerging markets,” the report concluded.

British and French companies are hoping the support their governments showed for the anti-Gaddafi forces will give them a head start in Libya, where high-quality oil reserves and damaged or aging infrastructure mean lucrative contracts could be up for grabs.

Firms have not been resting on their laurels, however, with executives telling Reuters in recent days that they already had representatives on the ground in Libya weeks ago when fighting was still fierce.

Green said his UK Trade and Investment office had two staff operating in Libya and planned to bolster that to 10 in the coming weeks and months.

“They (Libyans) are determined that this will be the turning of the page into a completely new era … It would be ridiculous of us not to rise to this opportunity,” Green said.

Britain is hoping that its support for Gaddafi’s opponents in the early days of the uprising will help overcome any reservations or awkwardness stirred up by former British prime minister Tony Blair’s leading role in bringing Gaddafi in from the cold and forging closer business ties.

ARMS DUMPS AND BEACHES

Nacua said the British government had played a key part in the overthrow of Gaddafi and he had no doubt British businesses would have an “equally instrumental role” in rebuilding Libya.

“We are still in a transitional time and there are a lot of challenges. Most of the institutions are not fully ready to receive a lot of businessmen but they will do their best, especially for healthcare,” the diplomat, who has been in exile for 33 years, said in an interview on the sidelines of the conference.

Immediate priorities included securing volatile arms dumps, repairing airports and care for injured fighters, Nacua told Reuters.

Green, who was in Libya on Monday, said it was clear many Libyans were “deeply grateful” for the role Britain played in recent months.

“This is a country that is intrinsically wealthy. They recognize the strength of British competence in so many areas. They recognize the strength of our infrastructure consultancy capabilities,” he told delegates.

Green described the potential for British businesses as enormous, noting the need for investment in its oil and gas industry, telecoms infrastructure, financial services, education and healthcare.

“As a person there for the first time it’s also obvious that this is a country with tourism opportunities,” Green added, noting Libya’s climate, beaches and world heritage sites.

Green said he had had “a really good series of meetings” with ministers and lunch with key business people during his trip to Libya.

He noted short-term imperatives, such as dealing with trauma and repairing infrastructure damaged during the conflict, but said Libya’s wealth, combined with decades of under-investment relative to oil-rich Gulf nations, meant the opportunities for businesses were considerable.

Green and Nacua warned, however, that continued fighting meant challenges faced any companies doing business in Libya.

“Working in Libya has always required patience and perhaps now, more than ever, I urge the international business community to be patient,” Nacua told the meeting.

(Editing by David Holmes and Hans-Juergen Peters)