Libyan government halts cooperation with Italy’s Eni

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The government of Libyan leader Muammar Gaddafi has halted all cooperation with Italy’s Eni and is talking to other energy groups about new deals, said Prime Minister Al-Baghdadi Ali Al-Mahmoudi.

Eni is the biggest foreign oil company in Libya and has had a presence in the North African country since the 1950s, but it angered Tripoli by suspending operations and establishing ties with rebels trying to overthrow Gaddafi.
“We have now ended all cooperation with Eni,” Al-Mahmoudi told a news conference in Tripoli, Reuters reports.

Al-Mahmoudi said the government in Tripoli was in talks with Russian, Chinese and U.S. firms over new projects in Libya, though he did not give details.

He said the Gaddafi government was prepared to let U.S. firms invest, because Washington is not taking a direct role in the NATO bombing of Libya.

Eni declined to comment on the matter, a company spokesman said.

Its shares were down about 1 percent at 15.52 euros at 1452

GMT.
“The announcement had no impact on the company simply because all oil and gas imports have been blocked since February,” said an analyst who declined to be named.
“It (halting cooperation with Eni) is a normal reaction against a country which participates in the NATO raids. Things would be different if Gaddafi remained in power in Libya for a long time,” the analyst said.

Eni, which produced 270,000 barrels of oil equivalent per day in Libya in 2010, has said it expects Libyan turmoil to cut its full-year output, after a nearly 9 percent drop in the first quarter.

A senior Libyan official told Reuters earlier this month that the government had begun negotiations with Russian and Chinese firms on taking over Eni’s projects in Libya after the Italian firm withdrew its staff.

Eni, like most other international oil groups with investments in Libya, suspended operations there after violence broke out in February following a rebellion against Gaddafi’s rule. Its contracts in Libya are in force to 2042 for oil production and 2047 for gas.

Other big investors in Libyan energy include Royal Dutch Shell Plc, France’s Total, BP Plc, Norway’s Statoil and Austria’s OMV.