Libya has set aside $100 billion to buy foreign assets, joining a group of oil-rich Arab states led by the United Arab Emirates that is searching for investment opportunities around the world. The North African state is considering foreign stocks, bonds, land and other assets in developed and emerging markets, as record oil prices swell its income, Libyan Prime Minister Baghdadi Mahmudi said in an interview late yesterday in Tripoli. ``We are now preparing to invest more than $100 billion outside Libya, in different fields,'' he said, without naming targets.

Separately, the holder of Africa's largest oil reserves is planning to spend $155 billion on local projects like housing, energy, education and communications, Mahmudi said. That opens up a second avenue of commercial cooperation with foreigners.

Muammar al-Qaddafi, Libya's ruler since 1969, mended relations with the west three years ago and has opened the door to joint investments with foreign partners beyond the energy industry.

Qaddafi agreed in 2003 to compensate the relatives of those killed in a 1988 plane bombing over Lockerbie, Scotland. He also pledged to give up efforts to develop weapons of mass destruction, two issues that had stalled diplomatic and commercial relations with many countries.

Long-Term Returns

``Libya will look at long-term returns and consider investing in funds managed by western banks,'' said Said Laswad, a professor of political studies at Tripoli's Al-Fateh University. ``It will also look at companies that can contribute to the construction effort, and train and provide jobs for young people.''

Qaddafi yesterday began talks in Paris with French President Nicolas Sarkozy to order civilian planes from Airbus SAS, weapons and a water desalination plant for a total of 10 billion euros ($14.7 billion). He is also seeking a nuclear- fueled power plant.

Africa's second-biggest oil producer after Nigeria has built up a sovereign wealth fund to benefit future generations, after fields have run dry. It will add to a portfolio of stakes Libya holds in foreign companies including Italy's Banca di Roma SpA and Juventus Football Club SpA. The country is emulating the Emirates, Kuwait and Qatar that have spent more than $65 billion this year on foreign acquisitions, including stakes in Citigroup Inc., Nasdaq Stock Market Inc. and buyout firm Carlyle Group.

Crude Exports

Libya exports $135 million worth of crude every day when prices are at $90 a barrel, according to state-run National Oil Corp. It produces 1.74 million barrels of oil daily, of which about 1.5 million are exported.

Domestic spending planned by Libya may benefit construction companies that have projects there such as Hyundai Engineering and Construction Ltd. and Impregilo SpA of Italy, as well as smaller contractors like Turkey's Guris Construction and Engineering Co., said Elhadi Elsherif, project supervision manager at the state-run Organization for Development of Administrative Centers.

Oil-importing nations such as the U.S. and Japan have transferred a combined $3 trillion more to the Organization of Petroleum Exporting Countries since 2001 than they would have paid had oil stayed near $20 a barrel, according to an estimate by Goldman Sachs Group Inc. The price of crude oil tripled in four years to a record $99.29 a barrel last Nov. 21.

At home, the government plans to spend 150 billion dinars ($123 billion) in five years on housing, schools, communications and transportation projects, and 40 billion dinars to increase Libya's oil and natural gas output, Mahmudi said.

``Implementation will start at the beginning of next year,'' he said.

End of Sanctions

Two decades of U.S and international sanctions, imposed on Libya until 2004, and low oil prices in the 1990s, made it hard for Qaddafi's government to provide housing and jobs for a growing population, now 5.5 million, of which two in three are under 30. The official unemployment rate stands at 13 percent.

Libya also plans to upgrade airports, ports, oil refineries and communications, and build hotels to accommodate an increasing number of tourists vying for desert trips, unspoiled beaches and Roman ruins such as Leptis Magna and Sabratha.

The country needs to build 500,000 housing units in five years, according to Elsherif, whose Organization for Development has been given a budget of 44 billion dinars for projects that include building 105,000 homes and 500 schools in three years.

Private Emphasis

The spending also aims at giving works to local private companies as the government seeks to reduce its own role in the economy. ``The private sector is a priority,'' said Mahmudi.

Qaddafi said in a speech to parliament in 2003 that state ownership of companies has failed. A year later, the government began selling to Libyans state-owned companies as part of a plan to lure investments needed to develop the desert state that is larger than Alaska. It also sold this year 19 percent of Sahara Bank to France's BNP Paribas SA, which will be the first foreign lender to resume retail banking in the country since Qaddafi toppled the monarchy. The government this year said it is also planning plans to sell part of another lender, Al Wahda Bank.

Oil and gas is the only industry that Qaddafi sought to keep under state control, as it accounts for 95 percent of Libya's exports, almost the totality of the government's operating budget of 9 billion dinars, and half the nation's gross domestic product, which stood at $50 billion last year.

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After the lifting of the economic sanctions, Libya stepped up oil exploration in partnerships with companies including BP Plc, Eni SpA and Exxon Mobil Corp. In the ventures, its own National Oil Corp. keeps a majority stake and has to bear most of the cost of developing new fields, and of building processing facilities like liquefied natural gas plants and refineries.

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Libya wants to increase oil production to 3 million barrels a day by 2013, and gas output from 2.7 billion cubic feet a day now to 3.8 billion cubic feet a day in 2015, as Europe demands more fuel from North Africa to reduce dependence on Russia.