Eni, Gazprom press ahead with Libya oilfield deal

Fri Sep 16, 2011 1:10pm GMT

By Vladimir Soldatkin and Stephen Jewkes

MOSCOW/MILAN (Reuters) - Italy's Eni will press on with an agreement to sell half its stake in Libyan oilfield Elephant to Russian energy giant Gazprom, as Moscow seeks to regain its footing in strife-torn Libya.

Eni, the biggest foreign oil producer in Libya, has a 33.3 percent stake in the Elephant field, 800 kilometres (500 miles) from Tripoli.

In February, Eni said, pending approval by Libyan authorities, Gazprom would take 50 percent of its Elephant stake, which it valued at $170 million. In a statement on Friday, Eni said it was laying the ground for "the future handover" to Gazprom, but did not give a timeframe.

A source at Gazprom told Reuters earlier on Friday the two parties were expected to sign an agreement giving Gazprom the right to acquire half Eni's stake in Elephant.

"The companies will sign an option agreement on Elephant. The option will not expire soon as there is war in Libya, and it won't end soon," the source said.

Some analysts are concerned Eni could lose assets or opportunities in the long run if Rome's hesitant support for the rebel government early in the conflict triggers a backlash.

The future of Russia's energy interests in Libya is also uncertain. The rebels, who are close to winning a seven-month war against Muammar Gaddafi, have already said firms from Russia and China could fall out of favour for the lack of support for the uprising.

Italy was once Libya's closest Western ally, and Italian Prime Minister Silvio Berlusconi has said Italy made the right decision by first courting and then abandoning Gaddafi, adding that turning on his old friend left him feeling "very bad".   Continued...

An official of Eni infront of their logo during a news conference in Milan March 1, 2006. REUTERS/Daniele La Monaca
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