Libya anticipates more foreign deals after Eni’s $8 billion natural gas investment
(Bloomberg) – Libya’s state energy firm said it expects to sign more deals with foreign companies after Eni SpA agreed to invest $8 billion to extract natural gas in the North African country.
Libya’s abundance of oil and gas reserves — among the largest in Africa — and its proximity to Europe could make it a key energy supplier to the continent. Yet its exports have been held back by political chaos for most of the period since the downfall of dictator Moammar Qaddafi in 2011.
“The energy sector has not witnessed an investment of this magnitude for more than a quarter of a century,” Farhat Bengdara, the chairman of Libya’s National Oil Corp., said to Bloomberg. It’s “a clear message to the international business community that the Libyan state has passed the stage of political risks.”
The NOC is negotiating investments in reservoirs and in energy infrastructure such as oil pipelines with other firms, he said.
Eni and the NOC are set to sign an agreement on Jan. 28 in Tripoli that will lead to the development of two gas fields off Libya’s western coast.
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Italian Prime Minister Giorgia Meloni may attend the event. She visited Algeria earlier this week as part of her efforts to boost petroleum supplies from North Africa and help Italy wean off those from Russia following its attack on Ukraine.
The two fields Eni will invest in will take about 3-1/2 years to develop, Bengdara said. They have estimated reserves of 6 trillion ft^3 and should be able to pump at a rate of 850 MMcfd for 25 years, he said.
Eni will take 38% of the gas sales until $8 billion is recovered, which is expected within 15 years. After that, Eni will take 30% until the end of the agreement — approximately 25 years — after which ownership will fully return to Libya.
The OPEC member’s oil sector has been more stable since a lull in fighting in mid-2020. Crude output’s averaged about 1.2 million barrels a day since September.
The NOC hopes to raise output to 2 MMbpd in three to five years, which will require substantial investment.