Eni, Italy's leading oil company, has signed a deal with Libya's interim leaders to restart crude production.
Eni deal to restart Libyan crude
Italy's leading oil company has signed a deal with Libya's interim leaders to restart crude production and help the country to rebuild after six months of civil war.
Paolo Scaroni, the chief executive of Eni, met the head of the National Oil Company in Benghazi only a week after the capital Tripoli fell to rebel forces.
Eni and the Transitional National Council committed "to creating the conditions for a rapid and complete recovery of Eni's activities in Libya and to doing all that is necessary to restart operations on the Greenstream pipeline bringing gas from the Libyan coast to Italy", the company said.
"Eni will also provide technical assistance to assess the state of facilities and energy infrastructure in Libya and to define the type and extent of operations required to safely restart activities," it said.
Eni will also provide emergency fuel supplies to Libya's people to meet basic needs.
The company will pay for this with funds that had belonged to the Qaddafi regime until frozen by Italy in compliance with UN sanctions, a diplomatic source told Reuters.
Meanwhile, Arabian Gulf Oil Company, also known as Agoco, said it would be ready to export crude by the end of next month, only two weeks after resuming production halted by Libya's civil war.
The company expects to start pumping 60,000 to 100,000 barrels per day, said Abdeljalil Mayuf, the manager of the company's information department,
"It's just a matter of carrying out some tests and making sure the equipment is working properly before restarting production," he told Bloomberg. "We will start with small quantities and if everything went well, we could raise production to 150,000 barrels."
Despite the prospect of production from Libya's oilfields resuming, Brent crude futures rose US$1.07 to $112.40 a barrel yesterday.
The price of oil had initially fallen after Tripoli was captured by rebel forces, as traders bet on a quick return of high-quality Libyan crude to world markets.
Until hostilities began this year, Libya was the third-largest oil producer in Africa.
During the conflict, Libya's rebels were able to export and market small amounts of crude from the east of the country as part of an agreement signed with Qatar. They are hoping the capture of Muammar Qaddafi's hometown of Sirte will put an end to resistance from loyalist forces.
Col Qaddafi's whereabouts remain unknown.
* with agencies