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Eni to Invest $8 Billion to Boost Libya Production

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Matthew Lloyd | Bloomberg | Getty Images
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Italy's Eni plans to invest $8 billion in Libya over the next 10 years to develop its upstream business as it moves to strengthen its grip as the leading international oil and gas producer in the country.

In a statement on Sunday, Eni said its Chief Executive Paolo Scaroni had presented the plan to Libyan Prime Minister Ali Zidan and Minister of Petroleum Abdelbari al Arusion in Tripoli.

The investments are designed to develop ongoing production as well as new exploration activities, it said.

Eni, which has operated in Libya since 1959, had to halt production early in 2011 after civil war broke out.

Some analysts expressed concern at the time a new Libyan government could punish Eni because of lukewarm support offered by the then center-right government of Silvio Berlusconi to the opponents of the former regime of Muammar Gaddafi.

Eni said the Libyan prime minister had also asked Eni at the meeting if it was prepared to develop new projects in the downstream sector "in conjunction with the new branch of the National Oil Corporation, which will be based in Benghazi".

The city of Benghazi was the stronghold of the former Libyan rebels in their struggle against the Tripoli-based Gaddafi regime.

Eni, which produces about one third of Libya's total output, was the first international company to resume production in September last year and currently produces 80 percent of pre-war output of roughly 280,000 barrels of oil equivalent per day.

The state-controlled major has oil production contracts in Libya that are in force until 2042 and gas contracts in force until 2047.

Eni also said a social sustainability agreement, worth about $400 million, had also been discussed, adding it could be signed during Ali Zidan's visit to Rome in late January next year.

Eni is the leading foreign oil and gas producer in Africa, an area of the world it expects will help it achieve its goal of a rise in oil and gas production of around 3 percent per year.

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