Italy’s Eni to invest $8 billion in Libya

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The Kingdom of Libya flag placed in front of a refinery in Ras Lanuf, Libya
The Kingdom of Libya flag placed in front of a refinery in Ras Lanuf March 8, 2011.
The flag which was used when Libya gained independence from Italy in 1951, has been used as a symbol of resistance against Libya’s leader Muammar Gaddafi during protests. Photo- REUTERS/Goran Tomasevic

Italy’s Eni is all set to invest $8 billion in Libya in the next 10 years to develop its upstream business.This move is widely been seen as a routine to gain more ground in Libya as a leading international oil and gas producer.According to a press release issued by the company, its’ Chief Executive  Paolo Scaroni had already met Libyan Prime Minister Ali Zidan in this regard and submitted its plan of action.With regard to the investments, emphasis is going to be on developing new exploration activities in addition to the ongoing production routines.Eni, which is in the fray in Libya from 1959, had to stop production  beginning of  last year due to civil war.

There is a buzz in the local media that Zidan specifically said to Scaroni whether his company is willing to come up with new projects in the downstream sector, in line with the new National Oil Corporation branch, which will be  based in Benghazi.Benghazi incidentally  was the stronghold of the former Libyan rebels when they were fighting against the Gaddafi regime.

Eni, which produces around one third of Libya’s complete output, was the first international company to kick start production in September of 2011. At this point in  time, the company produced, a  staggering 80 percent of pre-war output of roughly 280,000 barrels of oil on a daily basis.Eni  has oil production agreements in Libya until 2042 while gas agreements are applicable until 2047.It also disclosed the fact that a a social sustainability contract, valued around $400 million, had also been discussed during the meeting. Indications are that it could be signed during Zidan’s visit to Italy in late January 2013.

Eni has been widely  regarded as the top foreign oil and gas producer in Africa, an area which can play a prominent part in attaining the objective of increase in oil and gas production of around 3 percent per year.

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