Mohamed Aoun, the Minister of Oil and Gas in the current Tripoli-based government led by Prime Minister Abd Alhamid Aldabaiba, rejected on Saturday the Eni deal signed on the same day with Libya. He said it bypassed his Oil Ministry and cabinet approval and changed the deal signed in 2008.
Eni deal rejected by east too
Aoun was supported by Fathi Bashagha, the eastern-based prime minister appointed by Libya’s Parliament, the eastern-based House of Representatives (HoR). The HoR withdrew confidence from the Aldabaiba government in September 2021 and no longer recognises it as Libya’s government.
US$ 8 billion to produce 850 million cubic feet of gas
The new deal between Italy’s energy giant Eni and Libya’s state National Oil Corporation (NOC) aims to invest US$ 8 billion in two gas fields in the Mediterranean to produce 850 million cubic feet of gas.
The terms of this deal were agreed in 2008
Aoun said the agreement is illegal and lacks equality between the Libya and Italy. He said opening negotiations with Eni was a wrong issue, because this issue was negotiated in 2008 through 5 committees in which Aoun was the head of the main committee and Farhat Bengdara was one of its members.
He pointed out, in a video recording monitored by Libya Herald, that this area was discovered in the seventies and was not developed as a result of the Italian side’s reluctance, and the lack of follow-up by the NOC.
Production percentages and investment expenses already agreed
Aoun explained that the agreement with Eni had stipulated that their share would be 40 percent, and it would be reduced to 30 percent after 10 years. It was also approved by Libya’s cabinet of the time, the General People’s Committee.
He then wondered, “Their prescribed share was 30 percent, how does it become 37% according to the new agreement?” He also criticized the equal share of investment expenses between Libya and the Italian company.
New Eni agreement a clear violation of Libya’s rights
Aoun pointed out that this agreement is an explicit and clear violation, and a neglect of the rights and wealth of the Libyan state’s gains after bitter negotiations, especially with the rise in gas prices in 2008.
For his part, HoR’s prime minister, Fathi Bashagha, refused the change of the percentage of participation between the NOC and the Eni in the Mellitah Oil and Gas Company, considering any agreement in this regard illegal and he would challenge it before the local judiciary.
In the same context, Hassan Al-Dunali, a legal expert and former advisor to the NOC, confirmed to Libya Herald that the objections of Oil and Gas Minister Aoun to the NOC’s signing of the new contract with Eni illegal because it is not within its competence to conclude such contracts: “An objection that is improper and incorrect.”
2008 agreement valid for 25 years
However, he stressed the invalidity of signing new clauses that may violate the terms of the 2008 agreement, or create or entail new obligations on the Libyan state, or diminish Libya’s share in the old EPSA agreement, which is valid for twenty-five years from 2008.