Aydin Calik

Powerful Libyan state institutions have called on the country’s Tripoli-based government and NOC to halt contract negotiations on a key oil and gas project proposed by an Eni-led consortium.

The deal, estimated to cost $4bn-5bn, would see Italy’s Eni, France’s TotalEnergies, Abu Dhabi’s Adnoc and Turkey’s state-owned Turkish Energy develop block NC-07 in the Ghadames Basin, which is currently operated by state-owned Agoco. Current plans envisage at least 200mn ft³/d of gas and an unspecified amount of oil.

Many powerful figures have opposed the project on political, procedural and financial grounds for months, but opposition has grown louder in recent days as the Tripoli-based government and NOC appeared close to signing the deal.

Audit Bureau head Khaled Shakshak sent a letter dated 27 December to the head of the Tripoli-based government, Abdelhamid Dbeibeh, asking him to stop negotiations between NOC and the Eni-led consortium. This followed a similar letter by the Attorney General’s office on the same day asking NOC head Farhat ben Gudara to stop negotiations. The country’s eastern-based parliament also opposes the deal, as does oil and gas minister Mohamed Oun.

Among their concerns is the foreign consortium’s share of production, which they say has been set too high at 40pc. They also say that the gas reserves figure used as the basis for negotiations on NC-07 is too low, which means the consortium would be gaining a far greater amount of oil and gas than implied in the contract. While NOC’s Ben Gudara has said Eni estimates recoverable reserves of 2.7 trillion ft³, the oil and gas ministry has said the block could contain as much as 13 trillion ft³.

Another concern relates to the awarding process. The oil and gas ministry contends that the block should be offered in a public tender rather than be the subject of direct negotiations. Key figures, including oil minister Oun, have also argued that Agoco could develop the project alone for a fraction of the cost.

“The question of how the four companies were picked is particularly sensitive, because it indirectly raises suspicions of undue influence,” Jalel Harchaoui, a Libya specialist at the UK’s Royal United Services Institute, told Argus.

Libya remains politically fragmented, with rival governments in the country’s east and west competing for power. “The main motivation of those opposed to the deal is likely more political than technical,” Harchaoui said.

Analysts said Dbeibeh is championing the deal to bolster his position as the country’s internationally recognised prime minister. All four of the companies involved in the deal are from powerful countries that have played a key role in Libya since 2011.

Eni declined to comment. NOC could not be reached.


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