Italian Prime Minister prepares for Libya trip to sign oil and gas deals

Giorgia Meloni lines up visit as offshore agreements worth $8bn involving Italy's Eni are set to be finalised

Italian Prime Minister Giorgia Meloni is said to be heading for Libyan capital Tripoli, perhaps as early as Saturday. Reuters
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Italian Prime Minister Giorgia Meloni is preparing for a visit to Libya as part of efforts to secure more oil and gas supplies from North Africa.

Ms Meloni may go to the capital Tripoli as early as Saturday, Bloomberg reported.

The trip is not confirmed and might be delayed or cancelled because of security concerns, the news agency reported sources as saying.

The visit comes as Libya’s National Oil Corporation is set to sign offshore gas exploration and production agreements worth $8 billion with Italian energy company Eni, according to media reports.

Libya, Opec’s seventh-largest crude oil producer, has been looking to boost production after years of being plagued by conflict and political instability.

The NOC plans to bolster oil production to 2.1 million barrels per day by 2025.

To reach this target, it aims to develop new projects and rehabilitate oilfields damaged during conflict while increasing power supply to the areas.

Europe, faced with dwindling Russian exports, aims to secure alternative sources of natural gas.

The EU could fall short of up to 27 billion cubic metres (bcm) of gas this year if Russian deliveries drop to zero and China’s imports of liquefied natural gas rebound to 2021 levels, the International Energy Agency said in a report last month.

Eni this week signed agreements with Algeria's state energy company Sonatrach to explore opportunities in renewable energy, green hydrogen and carbon dioxide capture and storage projects.

The companies will also conduct studies to “identify possible measures” to improve Algeria's energy export capacity to Europe.

“These agreements bear witness to our commitment to ensuring Italy's security of supply while at the same time pursuing our decarbonisation objectives," Claudio Descalzi, chief executive of Eni, said in an earlier statement.

"The partnership between Italy and Algeria gets stronger today, and Algeria's key role as one of Europe's main energy suppliers is confirmed.”

Last year, Eni and Sonatrach signed an agreement granting the Italians the shipment of a further 9 billion cubic metres of gas through the Transmed pipeline, which runs to Italy via Tunisia.

With an equity production of 100,000 barrels of oil equivalent per day, Eni is one of the largest oil and gas companies operating in Algeria.

Natural gas, a critical energy source in Italy, accounts for almost half of the country’s electricity generation.

Algeria, a member of Opec, relies heavily on oil and gas, which accounted for 19 per cent of GDP, 93 per cent of product exports and 38 per cent of budget revenue between 2016 and 2021, the World Bank estimated.

The country is Africa's biggest gas exporter and supplies about 11 per cent of the natural gas consumed in Europe.

Updated: January 27, 2023, 10:43 AM