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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Eni Spa | BIT:ENI | Italy | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.116 | -0.78% | 14.708 | 14.662 | 14.80 | 14.854 | 14.656 | 14.846 | 8,546,828 | 17:00:00 |
By Benoît Faucon
LONDON--Libyan National Oil Co. officials have launched a charm offensive to reassure foreign companies that are increasingly nervous over the use of oil payments and security arrangements in the war-torn country.
The state-run oil company has been caught in the middle of a conflict playing out since the ouster and death of dictator Moammar Gadhafi, dividing the country between an internationally recognized government in the city of Bayda and an Islamist militia, Libya Dawn, that controls the country's capital of Tripoli. The industry has also been rattled by attacks by the radical Islamic State, worker strikes and sabotage of oil facilities.
Amid the mounting chaos, National Oil Co. and Libyan Central Bank officials have met with international energy companies to assure them that their oil payments are being managed transparently and independently, the company's chairman, Mustafa Sanallah, said in an interview with The Wall Street Journal on Monday.
Mr. Sanallah said he has hosted two gatherings in Malta since March involving officials from joint ventures with Marathon Oil Corp., ConocoPhillips and Hess Corp. of the U.S., Eni SpA of Italy and France's Total SA. He said he told them that the National Oil Co. was free of political interference in Tripoli and that its revenues moved transparently through the nation's banking system.
"We operate independently," said Mr. Sanallah, adding he still oversees oil-export contracts and official selling prices.
An Eni official confirmed its representatives attended a meeting in Malta and discussed security issues. Total, Hess, Marathon and ConocoPhillips declined to comment on the meeting.
Mr. Sanallah is also in London this week for an oil conference and meetings with foreign companies to discuss security arrangements in Libya.
While the National Oil Co. is one of Libya's biggest employers, most of its projects are joint ventures with western firms. The intensifying public diplomacy comes amid oil-company concerns that Libya's political chaos may be deepening.
United Nations-sponsored talks around forming a unity government have been unsuccessful so far.
Mr. Sanallah's efforts come as the Bayda government, which sees the National Oil Co. as a tool of Libya Dawn in Tripoli, is trying to create its own energy firm with the same name. The company hasn't been successful yet in selling any oil, and Mr. Sanallah said he still controls the nation's oil assets in the areas controlled by the Bayda government.
Last month, Total was forced to write down $659 million on the value of its assets in Libya in the first quarter while Austria's OMV AG said Monday it didn't expect production in the country to resume this year.
"Many companies consider [Libya] a loss for the time being," said Geoff Porter, head of North Africa Risk Consulting, which has advised oil companies operating in Libya. "They are just waiting for the situation to improve but they know it will take some time."
Other companies have been worried about the diversion of oil-revenue-which make up about 95% of its exports revenue--to finance the conflict.
"The U.S. companies were worried the oil payments could be used to fund militia," said one person who attended the meeting with Mr. Sanallah.
In the Malta meeting, Mr. Sanallah said he and Libya's central bank chief al-Sadiq al-Kabir explained oil payments were still being managed transparently and were used to pay public officials and services. The companies were told "there are no delays to payments" for crude exports or fuel imports, Mr. Sanallah said.
Mr. Sanallah said he had discussed beefing up security arrangements, as attacks from Islamic State, militias and unknown attackers had helped drive production down to about 436,000 barrels a day, down from highs of more than 900,000 barrels a day last year.
Mr. Sanallah said he and the oil companies discussed private-security contractors, closed-circuit television systems and intrusion-detection radars successfully used in other countries.
Mr. Sanallah said he had created a new position of general manager combining security and sustainability, seeing economic development as important to the sustainable resumption of oil production.
"It's not a political issue. We need to create jobs for locals," Mr. Sanallah said, adding that he believed the country's many tribes had been neglected under the Gadhafi regime.
Libya's oil output will be about 400,000 barrels of oil equivalent a day, Mr. Sanallah told a Platts conference on Tuesday in London, but he said production could increase by 200,000 barrels a day within two months once technical issues are resolved.
Mr. Sanallah's efforts come as the Bayda government, which sees the National Oil Co. as a tool of Libya Dawn in Tripoli, is trying to create its own energy firm with the same name. The company hasn't been successful yet in selling any oil, and Mr. Sanallah said he still controls the nation's oil assets in the areas controlled by the Bayda government.
Eric Sylvers contributed to this article.
Write to Benoît Faucon at benoit.faucon@wsj.com
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