The Chairman of Libya’s National Oil Corporation (NOC), Farhat Bengdara, signed in Tripoli with the CEO of Eni, Claudio Descalzi, the development of an Exploration, Production and Sharing Agreement Development (EPSA) agreement.
The agreement, worth US$ 8 billion, was signed yesterday in the presence of Italian Prime Minister, Giorgia Meloni, and Libyan Prime Minister, Abd Alhamid Aldabaiba. Meloni was on her first ever visit as Prime Minister to Libya.
The agreement aims to increase gas production to supply the Libyan domestic market as well as to ensure exports to Europe.
At the signing ceremony, the NOC referred to the agreement as a ‘‘strategic agreement’’ adding that the new production will be carried out through two main platforms linked to the current processing facilities in the Mellitah complex. The project also includes the construction of a Carbon Capture and Storage (CCS) facility in Mellitah, allowing for a significant reduction in the overall carbon footprint, in line with Eni’s decarbonization strategy.
The NOC said the combined gas production from the two structures will start in 2026 and will reach a 750 million standard cubic feet per day (MMscfd) of gas.
It stressed that the total investment will reach 8 billion US dollars, with a significant impact on the industry and its associated supply chain, allowing for a significant contribution to the Libyan economy.
NOC Chairman Bengdara said that the signing of the agreement is a clear indication that the oil sector in Libya is free of risks and is on its way to lead the country to a return to the ranks of the oil and gas producing countries of the world.
He added, “Our message as we sign this agreement is the need for international oil companies to return to their activities quickly, in accordance with the declaration of lifting force majeure in December of 2022.” He expected the production of the two fields will reach 850 million cubic feet of gas.
Bengdara pointed out that this agreement was signed in 2008 and was supposed to enter into force in 2017, but that did not happen, without explaining the reasons for the failure of its implementation.
For his part, Eni CEO Descalzi, stated: “This agreement will enable significant investments in the Libyan energy sector, contribute to local development and job creation while strengthening Eni’s role as a leading operator within Libya’’.
Eni the leading gas producer in Libya
It is noteworthy that Eni is the leading international producer of gas in Libya, with a share of 80 percent of national production (1.6 billion cubic feet per day in 2022). The company has been operating in Libya since 1959 and currently has a large portfolio of assets in exploration, production and development. Operations are managed by Mellitah Oil & Gas BV (Eni 50 percent, NOC 50 percent). Production averaged 165,000 barrels of oil equivalent per day in 2022.