Libyan Oil Ministry Questions Legality of Eni Deal

Libyan Oil Ministry Questions Legality of Eni Deal
Libyan Oil Ministry Questions Legality of Eni Deal

On Sunday, the Libyan Ministry of Gas and Oil reiterated its rejection of the deal signed between the Libyan state-owned National Oil Corporation (NOC) and the Italian energy company Eni.

The Ministry said in a statement that the agreement was concluded contrary to the legal legislation stipulated.

“This procedure requires prior approval from the Ministry of Oil and Gas to raise the share of the foreign partner (Eni), then the Ministry refers the approval to the Council of Ministers for decision,” the statement said. “But this did not happen,” it explained.

The statement said that only the Ministry of Oil and Gas is legally empowered to implement that agreement, not the NOC.

It also urged the NOC Chairman “to follow the legal measures and to refer the technical and economic justifications on the basis of which this amendment was made to the Ministry of Oil and Gas.”

“The NOC’s unilateral decision to amend agreements encourages other partners to amend their agreements without referring to the legislation stipulated in Libyan law,” the statement explained.

According to Reuters, the deal, signed during a visit to Tripoli by Italy’s Prime Minister, Giorgia Meloni, aims to increase gas output for the Libyan domestic market as well as exports. Meloni aims to do this through the development of two offshore gas fields.

“This agreement will enable important investments in Libya’s energy sector, contributing to local development and job creation while strengthening Eni’s role as a leading operator in the country,” said its Chief Executive, Claudio Descalzi.

The Libyan NOC expects to achieve net revenues estimated at $13 billion from developing an agreement it signed with the Italian company Eni to explore and share production in the Libyan oil and gas sector.

The Chairman of the Board of Directors of Libya’s NOC, Farhat Bengdara, said that the value of the investments included in the agreement amounts to $8 billion within 3 years.

During a press conference with Eni’s Chief Executive, Claudio Descalzi, Bengdara added that the agreement includes the development of gas fields with reserves close to 6 trillion cubic feet and a production capacity of 750 million cubic feet per day for a period of about 25 years.

Bengdara called on international companies to quickly resume their activity in the country, according to the declaration of lifting force majeure last December.