Eni Operations in Libya

=History=

Eni has been active in Libya since 1959. A key event in the history of the company's presence in the country was the 1997 discovery of the Elephant oil field, which launched production in 2004.

Between 1996-1999 Eni concluded several agreements with the National Oil Corporation (NOC) over a joint development venture in the Wafa field and in the Bahr Essalam field, located offshore 110 kilometres (km) north of Tripoli. In 2008 Eni, along with other international oil companies (IOCs), renegotiated the terms of their production contracts with the NOC, committing them to paying substantial upfront bonus payments.

Saipem, an Eni company, also built the Greenstream gas pipeline, part of the Western Libya Gas Project (WLGP), used to export natural gas produced in Libya to Italy. Eni had a 75 percent stake in the project. However 2010 saw Eni divest to the NOC a 25 percent stake in Greenstream BV, the company owning and managing the pipeline.

In the run-up to the 2011 conflict was the largest foreign player in terms of hydrocarbon production The company relied on the country for around 13-14 percent of its total production. However, the majority of operations were suspended from February 2011 onwards due to the civil conflict.

=Activities and Contracts=

In Libya Eni operates through its subsidiary Eni North Africa B.V. Eni participates in Mellitah Oil and Gas, a joint venture with the National Oil Corporation (NOC).

The company has oil production contracts in Libya in force until 2042 and gas contracts in force until 2047. In December 2011 Libya's National Transitional Council (NTC) issed a statement saying that agreements between Eni and the previous Libyan regime would be re-examined. However in January 2012 the Council issues a further statement, clarifying that it only planned to review Memorandums of Understanding (MoUs) rather than final contracts.

Eni's oil production capacity in Libya is just over 300,000 barrels per day (bpd), of which nearly 50,000 bpd is condensate and the remainder is crude. Total production during the 2011 conflict fell from about 280,000 bpd before war broke out to 50,000 bpd in the July. However in late September 2011 Eni resumed oil production in Libya, with the hope of having a large part of its output restored by the end of the year Eni was the first international company to resume production in the country, and as of late 2012 had reached pre-war production levels.

In December 2012 Eni CEO Paolo Scaroni presented a plan to the Libyan Prime Minister and Petroleum Minister to invest US $8 billion in Libya over the coming ten years to develop its upstream business. This would be targeted at developing ongoing production as well as new exploration activities. Scaroni also said that a social sustainability agreement, worth about $400 million, had also been discussed.

=References=