Imminent fall of strongman sparks scramble for Libya oil
MILAN—Libya’s leading foreign oil producer, Eni of Italy, led the charge back into Libya on Monday as rebels swept into the Libyan capital Tripoli to bring an end to the regime of strongman Moammar Gadhafi.
Gadhafi’s fall will reopen the doors to Africa’s largest oil reserves with new players such as Qatar’s national oil company and trading house Vitol set to compete with established European and US companies.
Shares in European companies Italy’s Eni, Austria’s OMV and France’s Total rose by as much as 5 percent despite a $2 fall in the price of oil on hopes the firms would be able to quickly reestablish output from Libya.
Italy’s Foreign Minister Franco Frattini said staff from Eni had arrived in the North African country to look into a restart of oil facilities in Libya’s east even as fighting between government troops and the rebels continued in Tripoli in the west.
“The facilities had been made by Italians, by (oil field services group) Saipem, and therefore it is clear that Eni will play a No. 1 role in the future,” Frattini said.
Libya, an Opec member, was producing about 2 percent of the world’s oil output or 1.6 million barrels per day before the civil war. The North African country has reserves to sustain that levels of production for 80 years.
OMV said it was not in any talks yet. “We are observing the current situation and further developments very closely. At the moment we are not holding any bilateral talks with the (National) Transitional Council,” said an OMV spokesperson.
Analysts and industry observers have said Italy’s Eni and France’s Total could emerge as the big winners in post-war Libya due to their countries’ heavy support for the rebels.
Big support from Qatar as well as oil trader Vitol, neither producers in Libya before the war, may also guarantee a chunk of reserves and influence goes to new players.
“Qatar will be a big player, Vitol might be an important one. Shell is also looking to boost its role,” said a Western risk consultant with knowledge of negotiations.
Most global oil majors have taken a much more cautious approach to events in Libya with BP, not yet a producer in Libya, saying it was planning to return to explore but giving no time frame.
“We fully intend to return to Libya to fulfill our contract when conditions allow,” said a spokesperson for BP, which did not have production in Libya before the war.
US companies such as Marathon, ConocoPhillips, Hess, Occidental have pulled out of Libya at the start of the year and have had little direct involvement in the events there since then.
“They are just sitting and waiting and trying to figure out who will run the place,” said the risk consultant who is advising some US firms on Libya. Reuters
