Oil

Eni to Invest $8 Billion to Boost Libya Production

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Matthew Lloyd | Bloomberg | Getty Images

Italy's Eni plans toinvest $8 billion in Libya over the next 10 years to develop itsupstream business as it moves to strengthen its grip as theleading international oil and gas producer in the country.

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

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

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

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

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

The city of Benghazi was the stronghold of the former Libyanrebels in their struggle against the Tripoli-based Gaddafiregime.

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

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

Eni also said a social sustainability agreement, worth about$400 million, had also been discussed, adding it could be signedduring 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 ofa rise in oil and gas production of around 3 percent per year.