Azernews.Az

(Newswires, September 1) – The head of Eni SpA, the Italian oil giant, said Libya's new government will respect all existing oil contracts and Libyan oil production should return to pre-crisis levels by the end of 2012 at the latest.

Eni Chief Executive Paolo Scaroni said in an interview the company also hopes to reopen the Greenstream pipeline, which brings Libyan natural gas to Italy and which was shut down shortly after the uprising broke out, by Oct. 15.

Mr. Scaroni said he is confident Eni can get its Libyan oil and gas fields up and running soon, because there is no evidence of deliberate vandalism to production facilities – though vehicles, pumps and generators have been removed and some fields may have to be cleared for mines.

Libya was producing 1.6 million barrels of oil a day before the anti-Gadhafi uprising broke out in February, but output slowed to a trickle and exports halted completely as the violence intensified. The disruption created a headache for European refiners, which are heavily dependent on Libya's light, sweet crude.

Western oil companies active in Libya, such as Total SA of France, Eni and Spain's Repsol YPF SA shut down operations when the violence flared but are now gearing up to return. All have been in contact with the National Transitional Council about resuming their activities.

The process of getting Libya's oil industry back on track will likely be hastened by the European Union's decision Thursday to lift sanctions on Libya's ports, banks and energy firms.

Eni was the largest foreign oil operator in Libya before the unrest began, with about 280,000 barrels a day of production there last year. Unlike other Western oil companies it never entirely quit the country, pumping some gas to supply local power stations even at the height of the war. Eni says it will take between 12 and 18 months for Libya to get back to its prewar production levels.

Mr. Scaroni said the NTC had assured him that all the oil contracts signed in the Gadhafi era were sacrosanct and would be respected. "Every time I've met any authority of any kind, they say the same thing – contracts are contracts," he said.

Eni's biggest venture in the north African country is the Western Libyan Gas Project, which produces gas both for domestic consumption and for export from a big onshore field near the border with Algeria, Wafa, and two offshore platforms in the Mediterranean, Bouri and Sabratha. The gas is transported to the Melittah treatment plant for processing before being pumped to Europe.

Mr. Scaroni said the project could be restarted soon, and Eni would like to see Greenstream reopened by Oct. 15th. He said it was important for the purposes of Italy's energy security to relaunch Greenstream before the onset of winter: it is one of four pipelines that bring gas to Italy, and two of the others – one running from Russia and another from Algeria – could also be vulnerable to supply disruptions. The Algerian pipeline, for example, runs across Tunisia, where the political situation remains fluid, with elections now scheduled for Oct. 23.