Eni’s CEO Paulo Scaroni has struck a sanguine note over a recent declaration by politicians in Benghazi to declare the oil rich East Libya a semi-autonomous state-within-a-state.
Speaking at the IHS CERAWeek 2012 conference, Scaroni said that for the time being at least, a push towards federalization would not affect the company’s interests in the country.
“There are some people who want that but the majority wants more of a federal system, which is I believe more acceptable to all Libyans than a separation,” said Scaroni. “It’s very early to say since it happened this morning but I’m not expecting it will affect oil production.”
The emergence of a new semi-autonomous region in Libya adds political risk to companies operating the east, as it raises the possibility that existing oil contracts – which the Libyan National Transitional Council has upheld – would be renegotiated and rival industries emerging within the country.
Yesterday Ahmed Zubair al-Senussi emerged at the head of a 4,000-strong convention in Benghazi to announce the semi-autonomy of “the whole eastern region of the country.” The announcement has no official force and it is unclear how much popular support there is for federalism along the lines al-Senussi declared.
Eni is Libya’s single largest oil and gas producer, with its output of 244,000 barrels per day (bpd) – some 40% of total national production –before the 2011 conflict largely restored.
Eastern Libya contains the Nafoora, Waha, Sarir, Hamadi, Mabruk and Zuetina onshore fields, which together hold most of Libya’s oil. It also includes key export infrastructure including the Tobruk, Brega and As Sidra export facilities.
Eni has stakes in the Bu Attifel, Elephant and Bouri reservoirs in the East, which have a cumulative production capacity of 43,800 bpd for the benefit of the Italian oil firm.
The Libyan National Transitional Council – the temporary executive largely shunned by Libyans – is due to convene a general election in June. Whether calls for federalism survive this process is unclear.
“The NTC is of the opinion that what happened today … is a very critical and serious issue that hampers and threatens national integrity and unity,” said National Transitional Council chairman Mustafa Abdul Jalil, who derided calls for federalism as a “foreign plot.”
While Jalil did not name the origin of the ‘plot’, leading NTC figures have previously complained of Qatari influence in the country.
