Libya to resume deal with Italy to compensate for gas shortage

The Libyan National Oil Corporation (NOC) announced yesterday the resumption of the implementation of an agreement signed in 2008 with the Italian energy company ENI to compensate for an expected shortage in Libya’s natural gas production in 2025.

In its statement, NOC made “a clarification regarding the negotiations with the Italian ENI company as for the percentage it obtains from the production of natural gas fields in marine areas A and E.”

A few days ago, a controversy escalated over the re-signing of a gas production investment contract in offshore fields between the NOC and ENI.

The NOC said, “this agreement was signed in 2008.”

According to the statement: “In 2013, the commercial advertisement for the project was issued, but for various reasons, it has not been implemented until today.”

Thus, NOC “held a meeting last August 24 with ENI’s administration, during which it demanded the implementation of the project. ENI hesitated initially because of political and security concerns, and after many meetings, it responded.”

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NOC presented reasons for the urgent implementation of the project, the first of which is that “gas production in the Al-Wafa and Al-Salam fields will begin to decline in 2025, with an estimated quantity of more than 440 million cubic feet per day.”

According to the statement, this decline will lead to “a deficit in providing gas for domestic consumption if the shortage is not compensated by investment and increasing production, which will force the Libyan state to import gas for power stations.”

“The achieved revenue by Libya from this investment ranges between $13 and $18 billion, after restoring capital and operating expenses,” NOC said.

Moreover, “an investment of $8 billion will bring Libya back to the fore and encourage attracting investors in the oil and gas sector, which will contribute in moving the economy and raising income levels,” according to NOC.