Libya to review contracts with Italian oil major ENI

Libya on Thursday said it will review its contracts with Italy's ENI and insisted the oil major participate in reconstructing cities destroyed by Moamer Kadhafi's forces in the conflict.

The decision to review the contracts was communicated to the Italian firm's Chief Executive Officer Paolo Scaroni on Wednesday by Prime Minister Abdel Rahim al-Kib during a meeting, the statement from Kib's office said.

Kib informed Scaroni that "the contracts signed between ENI and the former regime are going to be reviewed and re-examined to meet Libya's interests before being executed," the statement said.

Earlier this month, Scaroni said it was "unthinkable" that his company's existing contracts would be changed by the new Libyan authorities.

ENI signed a deal with Libya's National Transitional Council in August to resume its crude oil production in Libya.

Kib said in Thursday's statement that the new Libya "will not accept any projects that are dictated to it," adding that Tripoli "will have an effective role and say in the choice of the projects and their approval."

An ENI spokesman when contacted by AFP said the contracts Kib's office was talking about were unrelated to the Italian firm's oil production activities.

"The two contracts are linked to social initiatives and have nothing to do with oil," the spokesman said.

Kib further said that foreign companies operating in Libya must prove their loyalty to the people of the North African country.

"Foreign companies that worked in Libya have to prove to Libyans that they were partners of Libya and not of Kadhafi and his regime. ENI has to prove that by playing a significant role in the reconstruction of the cities destroyed by Kadhafi's forces," the statement quoted Kib as saying.

Kadhafi's ouster created opportunity for companies hoping to see a redistribution of oil contracts to the benefit of countries that participated in the military campaign to overthrow the long-time dictator, threatening existing contracts.

But Scaroni said on December 8 that he was not concerned about the issue.

"I have to tell you that I've never been concerned about that. First, all the Libyans contracts, including ours, are long term contracts assisted by international arbitration," the ENI chief said at the World Petroleum Congress in Doha.

"I think it's unthinkable for any oil country, including Libya, to change these legal mechanisms and therefore I don't see how these contracts can be changed," he added.

"Second, the priority for Libya of course is to restart production as soon as possible, to get back as soon as possible to previous production and possibly more," Scaroni said.

Kib said on Thursday that he regretted the "negative position of the majority of oil companies working in Libya towards the revolution of the Libyan people against the tyrant's regime."

"These companies had big opportunities to help the Libyans in the revolution but did not do it," he said without elaborating.

ENI has resumed production of about 70 percent of its pre-conflict output in Libya, of around 200,000 barrels per day.

The company has been in Libya -- a former Italian colony -- since 1959 and is the biggest foreign energy producer in the oil-rich country.

Italian Prime Minister Mario Monti said Thursday he would visit Tripoli on January 21 with the aim of reviving a bilateral friendship treaty, signed by Kadhafi and Monti's predecessor Silvio Berlusconi, that was suspended during this year's conflict.


(Source: AFP)

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