Leonardo Bellodi
The prospect of the pipeline closing GreenStream, which transports Libyan gas to Italy, is more worrying for Libyan consumers than for Italian ones. For at least two reasons. The first is of an economic nature.
Approximately 80 percent of the gas extracted by Eni in the North African country is for use and consumption by the Libyan internal market. Only a minority part is exported to Italy via pipelines that cross the seabed of the Mediterranean Sea and land in Gela, Sicily, with a negligible impact on the demand for national gas. In other words: theItaly can also do without Libyan gas, Libya certainly cannot. The second reason is of a political nature. The closures of oil fields and wells in the former Colonel’s Jamahiriya Muammar Gaddafi they are not uncommon. Indeed, they happen often and are the symptom of deep political divisions which in some cases have degenerated into civil war, as happened in 2019-2020. “Agenzia Nova” spoke about it with Leonardo Bellodi, adjunct professor at the Luiss Business School and author of the book “The shadow of Gaddafi. Money, terror, oil”.
“There has been a decrease in flows from Libya for some time and this is due to the fact that the vast majority of Libyan production is aimed at local consumption. This is why these latest events in Libya have not led to catastrophic events regarding gas imports in Italy”, he states Bellodi, in reference to the closure of the gas valves destined for Italy for a few hours which occurred yesterday in Libya by the Guards of the oil facilities. According to tables from the energy department of the Ministry of the Environment and Energy Resources, Italy imported 2,522 billion cubic meters of gas from Libya in 2023, down 3,7 percent compared to the previous year. Libyan gas had an impact of 4,17 percent on Italian gross domestic consumption, equal to 61,520 billion cubic meters. To make a comparison, Algeria accounted for 37,35 percent of the demand for gas in Italy: even today, for every cubic meter imported from Libya, almost ten arrive from Algeria. “Of course, it is clear that we must always keep in mind that the security of supplies depends on turbulent countries such as Libya first and foremost, but also Algeria and Egypt,” he adds Bellodi.
After the outbreak of the war in Ukraine, as is known, Algeria replaced Russia in the role of Italy’s main gas supplier. However, second Bellodi, in the current international context no source of supply is 100 percent secure. “Algeria is a bit of a pressure cooker. It is clearly a stable country, but it has a huge population explosion. Today’s young people consume much more than 20 years ago. This means that there is a very significant internal consumption compared to previous years”, states Bellodi. The same argument can be applied to Egypt, forced to suspend LNG exports due to the internal economic crisis and the outbreak of the conflict between Israel and the Palestinian movement Hamas in the Gaza Strip. “The point is that Italy is not a sovereign country from an energy point of view”, adds the expert, questioned by “Nova” also on the current Red Sea crisis. “It does have an impact, but we don’t have an oil or gas shortage. There is an issue of prices, which is mostly due to the fact that you have to travel 4 kilometers more. Many observers expected shocks, but at the moment there have not been any,” he adds.
Libya, despite being a member of OPEC oil cartel, accounts for 1 percent of the world’s oil. Of course, Libyan crude oil has characteristics (such as the almost total absence of sulfur) that make it very attractive for refining. “But even on gas we are not at all dependent on Libya, on the contrary. I see Libya as a political issue, rather than an economic one,” says Bellodi. In fact, Libyan territory boasts the largest oil reserves of the entire African continent: it is, therefore, a theoretically very rich country. Yet political divisions make the country unstable, at times ungovernable. “Libya is a tribal society, which was held together with carrots and sticks by Gaddafi for 42 years. Once this dictatorial system fell, the confrontation between the different tribes began again. The real issue, in my opinion, is that if a Libyan state exists, I’m not so sure that a Libyan national team also exists”, adds Bellodi.
The problems intrinsic to Libyan tribal society, according to the expert, have been somehow exploited by external actors. “One of them is Turkey, which is gaining more and more weight. Russia has also been present in Libya for a long time and not only from a military point of view alongside the general Khalifa Haftar: it has a more political role and a non-negligible presence not only in Libya, but also in other African countries.” It’s not all.
The possible closure of the pipeline that brings Libyan gas to Italy must be placed in the context of the fierce political battle underway for the huge finances of the North African country. At this moment, in fact, there are numerous open issues at the financial level. The most significant move is the creation by Aguila Saleh, president of the Libyan House of Representatives, the parliament elected in 2014, of the broad-based reconstruction fund established after the disaster in Derna, a city in eastern Libya swept away by the subtropical cyclone Daniel, led by Belkacem Haftar, one of the sons of General Haftar, commander of the Libyan National Army headquartered in Benghazi. A fund that should actually be financed by the governor of the Central Bank of Tripoli, Al Siddiq al Kabir.
On February 20, the President of the House of Representatives of Libya made an official appeal to the Central Bank of Libya, as well as to all public institutions and companies in the country, not to transfer funds to the Prime Minister’s Government of National Unity Abdulhamid Dabaiba, based in Tripoli. “The issue of the relationship between the government and the Central Bank arose immediately after 2011. The Central Bank is the country’s treasury, and it is the government that depends on it, and not vice versa. We have witnessed many closures and openings in Libya. And most of these dynamics are internal in nature. I don’t think the closures have anything to do with pressure on the Italian government”, explains Bellodi, not believing the theory according to which the closure of the Mellitah gas export terminal is an attempt by Dabaiba to push Italy to convince the Bank central to release the funds for the Tripoli government. “It seems like a conspiracy theory to me, perhaps true but not true,” concludes the expert.
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Leonardo Bellodi, adjunct professor at the Luiss Business School: “About 80 percent of the gas extracted by Eni in the North African country is for use and consumption by the Libyan internal market. Only a minority part is exported to Italy”
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