Italy-based Eni lobbying Libyan rebels to keep its oil dominance in country; Paris-based Total seen as threat due to France's leading role in helping rebels; BP, BASF, ConocoPhillips, Repsol and OMV also could gain from greater access
August 25, 2011
– After the fall of Libyan dictator Muammar Qaddafi, Italian oil giant Eni SpA is lobbying rebel leaders to maintain its position as Libya’s top energy producer, reported Bloomberg News on Aug. 24.
Paris-based Total SA is thought to be the biggest threat to Eni’s dominance in Libya, as France played a leading role in international support for the rebels early in the civil war that began in February.
It is not know how soon Libya’s oil production will resume, but the new government has made it a “top priority,” said IHS Senior Middle East energy analyst Samuel Ciszuk in a note. The country had produced over 1.5 million barrels a day.
Other companies operating in Libya that could benefit should they gain greater access include London-based BP PLC, Houston-based ConocoPhillips, Germany-based BASF SE’s Wintershall division, Madrid-based Repsol SA, and Austria’s OMV AG.
Libya’s new government is expected to honor any pre-existing agreements, said Eni Chairman Giuseppe Recchi, Bloomberg reported.
Even though old contracts will remain intact due to international law, new contracts “are up for grabs,” said Nicolo Sartori, an energy and defense analyst at Rome’s Institute for International Affairs.
Eni’s concerns stem from the pressure on France’s President Nicolas Sarkozy to show voters that France will gain from its investment in the Libyan conflict, said Sartori.
France wants to “remain at the forefront” of Libya’s efforts to rebuild the country, said government spokesperson Valerie Pecresse, reported Bloomberg.
Total declined to comment on its plans in Libya, where it produced 55,000 barrels/day of crude, other than to say it is watching to see when oil production might restart. Total gets 2.5% of its production and 13% of its revenue from Libya.
It might take about a year for Libya’s oil production to be fully restored and two to three months for gas flows to fully resume, Eni has said. The company’s output in Libya plummeted to about 50,000 barrels/day of oil equivalent from 280,000 before the conflict.
Eni has kept in touch with rebel groups throughout the conflict, hoping to keep the U.S., the U.K. and France from taking advantage of their helping in overthrowing Qaddafi, said an anonymous source, Bloomberg reported.
The primary source of this article is Bloomberg News, New York, New York, on Aug. 24, 2011.