Italian oil giant, Eni, has dominated Libya’s energy industry for six decades, while its future in the North African country now hangs in the balance as war rages on.
The week the Libyan revolution began in 2011 was one like any other for workers at Italian oil company Eni SpA in the North African country.
They played soccer and watched movies, oblivious to the battles with police and mounting deaths in the revolution that toppled Muammar Gaddafi.
Reality only sunk in for former Eni engineer Ahmed Sheikhi five months later when he returned home from the Mellitah Oil & Gas complex in western Libya.
“I felt as though I had been in another country,” he said.
That insulation from unfolding chaos is being tested like never before as Libya slides into a full-blown civil war.
The fighting between two rival administrations threatens to permanently divide a key OPEC producer and disrupt global energy markets.
It’s created a vacuum that could allow Islamic State and criminal trafficking groups to destabilize Libya’s neighbors, including Europe.
Eni endured the coup that brought Gaddafi to power in 1969 and the uprising that toppled his regime 42 years later by effectively operating as a state within a state.
However, the Italian giant’s ability to thrive is now more about survival in a place whose oil industry it’s dominated for six decades and which is its biggest source of petroleum.
Eni, which is headquartered in Rome, evacuated its Italian staff in April, when fighting on the frontline, in the southern suburbs of Tripoli, intensified as world leaders prepared to converge this week for the annual UN General Assembly in New York, where a meeting was set for Thursday to discuss the latest Libyan peace initiative, this time from Germany.
Meanwhile, just a few hundred local Eni employees are still working in the country, while about a dozen managers fly in and out for meetings, tending to spend no more than a night in the capital, according to people familiar with the company’s operations.
“We continue to produce, the situation is stable, there are issues in Tripoli but those have been dragging on for 10 years,” Chief Executive Officer Claudio Descalzi said in June.
The following month, he met with UN-backed Prime Minister Fayez al Serraj and confirmed his full commitment to stay in the country.
The company, which accounts for 45% of Libyan gas and oil production, declined to comment further when contacted for this story.
Libya’s oil infrastructure emerged unscathed from the revolution that ended with Gaddafi’s death in October 2011.
Oil exports may have been disrupted but all sides sought to avoid damaging facilities. Since then though Africa’s largest crude reserves, source of more than 95% of export revenue prior to the uprising, have been targeted by factions vying for influence.
There have been protests, attacks on pipelines and fighting around key facilities, leading to severe disruptions. Though no group has been able to legally export oil independently of the National Oil Corporation, holding fields and terminals provides leverage.
The Libyan National Army currently controls the bulk of Libya’s oil system, from fields to pipelines to export terminals. The Mellitah Oil & Gas complex, in Zuwara, a joint operation with the NOC that supplies Italy with 8-10 billion cubic meters of gas every year through the Greenstream pipeline, lies outside LNA’s zone of influence, but it has been trying to gain ground in the area.
Italy initially opposed the intervention that led to Gaddafi’s ouster, with Rome saying it wanted to avoid comparisons with its 1911-1943 colonial rule over the North African country, but later relented when NATO was chosen to lead it.
When the country split in 2014 between the two rival administrations, it backed the western-based government.
Things may be shifting. Prime Minister Giuseppe Conte met Serraj in Rome on September 18 to discuss issues including migration, a dominate theme in Italian politics and according to a government official who asked not to be named, said Italy will seek dialogue with other forces because the crisis requires a political solution, not a military one.
For Arturo Varvelli, co-head of ISPI’s Middle East and North Africa Centre, that’s a sign “Italy’s government has now taken a very ambiguous position on Libya, and is taking equal distance between the two sides.”
“This is to protect Eni’s interests,” Varvelli said. LNA has taken control of some its wells in the south and that “has led to an approach that has been unseen previously by the Italian government.”
The reality for Eni is that Libya’s warring factions haven’t shown any genuine interest in a peace deal and the standoff has worsened with the support both sides get from other countries. But if any foreign company knows how to navigate the complex web of interests, it’s Eni.
