Libya hits ENI but oil deals seem safe

Libya's government told its biggest oil investor, Italy's Eni, to help rebuild the country while it is reviewing some deals although the company said that oil deals were so far safe. Almost all global oil companies signed contracts with the former regime of Muammar Qaddafi and possible revision of these has been one of the biggest worries for investors since the dictator was ousted and killed earlier this year. Analysts and insiders have speculated that the new Libyan government may want to punish companies from Russia and China, whose governments didn't support the uprising, as well as from Italy, which was hesitant to offer its support during the early days of the revolution. "Foreign companies working in Libya should prove to the Libyans that they were partners with Libya and not with Qaddafi and his regime," interim prime minister Abdurrahim Al-Keib said in a statement after meeting Eni's chief Paolo Scaroni. "Eni has to prove that (partnership with Libyan people) through playing a distinguished role in reconstruction of cities that were destroyed by Qaddafi's forces," he said adding the government was suspending some contracts. Eni said the government would suspend only social sustainability program agreements and not its massive oil operations, which represent 10 percent of Libya's total oil output and 18 percent of its gas production. "The review regards two social sustainability agreements of 2006 and 2010, not oil," the spokeswoman said. The government's statement, unusually strongly worded, did not mention the word oil. It said Scaroni had said he wanted to resume activities and complete projects under agreements signed in 2006 and 2010, but did not mention their details or say they were unrelated to oil. A source close to the Libyan oil minister told Reuters the review would not affect Eni's oil operations. The statement said Keib expressed his regret over what he said were the negative positions of most oil companies operating in Libya during the revolt against Qaddafi. It also quoted Scaroni as saying "the company's activity would go back to normal by next June."