Libya and Italy signed on Saturday 28 January 2023 in Tripoli, the Libyan capital, an agreement for the exploitation of two gas fields in the offshore block in northern Libya. The agreement is worth $8 billion and aims to produce 850 million cubic metres of gas per day from 2026.
This is the largest investment in the Libyan energy sector since 2000. Indeed, Italian hydrocarbon giant Eni and Libya’s National Oil Company NOC have signed a major agreement to increase energy supplies to Europe. In a sign of the importance of this agreement, Italian Prime Minister Giorgia Meloni travelled to Tripoli on Saturday and became the first European leader to go there for two years.
“We are here today to sign the most important agreement of the last twenty years,” said Claudio Descalzi, CEO of Eni. The Italian group also said in a statement that this is the “first major project developed in Libya since 2000” on two offshore fields, capable of producing “from 2026, between 750 and 800 million cubic metres of gas per day”.
According to NOC director Farhat Bengdara, the contract calls for an investment of $8 billion over a three-year period, adding that the sector has not seen such a partnership for 25 years. This is “the result of long negotiations” between the two parties, in which “we took into account the interests of the Libyan state and the strategic interests of our partner”, he added, before welcoming a new “testimony to the strength” of relations between the two Mediterranean countries.
Farhat Bengdara also took the opportunity to reiterate the Libyan authorities’ willingness for international companies to return to Libya. Because, he says, Libya has the most abundant energy reserves in Africa. The signing of the Italo-Libyan agreement is “a clear indication that the oil sector is risk-free” and that it is capable of “competing with” the world’s leading oil-producing countries, he reassures.
Moreover, it must be said that the agreement comes in a context where Italy is seeking to get rid of Russian gas imports. As a result, it aims to become a new energy hub between Africa and Europe. The country has already taken the lead in sourcing Algerian gas by establishing a new strategic partnership that includes investments to help state-owned energy company Sonatrach reverse years of falling production. On 23 January, the head of the Italian government visited Algeria where an agreement was signed to free Italy from Russian gas.