Tuesday, July 23, 2024

Italy’s Eni signs $8 billion Libyan gas deal during Prime Minister Meloni’s visit to Tripoli

ROME/TRIBOLI, Jan 28 (Reuters) – Italian energy giant Eni and Libya’s National Oil Company (NOC) signed an $8 billion gas production deal on Saturday aimed at increasing energy supplies to Europe despite insecurity and political turmoil in the North African nation.

The agreement, signed during a visit to Tripoli by Italian Prime Minister Giorgia Meloni, aims to increase gas production for the Libyan domestic market and for export.

Output will reach a plateau of 750 million cubic feet per day beginning in 2026, Eni said in a statement.

“This agreement enables major investments in Libya’s energy sector, contributing to local development and job creation, while strengthening Eni’s role as the country’s leading operator,” said its chief executive, Claudio Descalzi.

Meloni met with Libyan Prime Minister Abdulhamid al-Dibiba, head of the internationally recognized Government of National Unity (GNU), for talks in Tripoli that also focused on migration across the Mediterranean.

At a joint news conference with Descalzi, NOC President Farhad Bengdara said the gas deal lasted 25 years and was the most important new investment in Libya’s energy sector in a quarter of a century.

European countries have increasingly sought to replace Russian gas with energy supplies from North Africa and elsewhere over the past year because of the war in Ukraine.

Italy is already a leader in gas extraction from Algeria, where it is building a new strategic partnership that includes an investment in state energy company Sonatrac to help it reverse years of declining production.

Political risk

However, the agreements reached in Tripoli could be undermined by Libya’s internal conflict, which has divided the country between rival factions vying for control of the government and denying each other’s claims to political legitimacy.

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Underscoring the uncertainty, Dbeibah’s own oil minister, Mohamed Oun, ruled out any deal the NOC could strike with Italy, saying in a video on the ministry’s website that such deals would have to be made by the ministry.

Eni’s Descalci said the deal would also include a carbon capture facility and solar power.

NOC chairman Bengtara was appointed last year by Dbeibah, whose own interim government was installed in 2021 through a UN-backed process.

The eastern-based parliament and factions that support it said early last year that the government was no longer legitimate, rejecting both Bengtara’s appointment and Tripoli’s deals with foreign states.

Chaos in Libya since the 2011 NATO-backed uprising that ousted dictator Muammar Gaddafi has left much of the country in the hands of armed factions.

In statements to the press, DiPeba and Meloni also discussed illegal migration from Libya to Italy, which Rome’s right-wing leader made central to his political campaign when he came to power.

Dbeibah said Italy would support Libya by providing new search and rescue vessels.

Insecurity and lawlessness have made Libya a large, albeit dangerous, port for migrants trying to reach Europe, often via Italy. Every year hundreds of migrants die trying to make the journey.

Italy’s Interior Minister Matteo Piantossi, who oversees the migration issue for Rome, accompanied Meloni to Libya, as did Foreign Minister Antonio Tajani.

Reporting by Ayman al-Warbali in Libya and Gavin Jones in Rome; Additional reporting by Ahmed Dolba and Enes Alashrey in Cairo; By Angus McDowall and Gavin Jones; Editing by Clelia Oziel

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