Italy and Libya sign $8 billion gas agreement as Meloni visits Tripoli

Italy’s prime minister held talks in Libya on Saturday with officials from the country’s west-based government focusing on energy and migration, top issues for Italy and the European Union. During the visit, the two countries’ oil companies signed a gas deal worth $8 billion - the largest single investment in Libya’s energy sector in more than two decades.

Libya is the second North African country that Prime Minister Giorgia Meloni, three months in office, visited this week. She is seeking to secure new supplies of natural gas to replace Russian energy amid Moscow’s war on Ukraine. She previously visited Algeria, Italy’s main supplier of natural gas, where she signed several memorandums.

Meloni landed at the Mitiga airport, the only functioning airport in Libya’s capital, Tripoli, amid tight security, accompanied by Italian Foreign Minister Antonio Tajani and Interior Minister Matteo Piantedosi, her office said. She met with Abdel Hamid Dbeibah, who heads one of Libya’s rival administrations, and was also to hold talks with Mohamed Younis Menfi, who chairs Libya’s ceremonial presidential council.

At a round-table with Dbeibah, Meloni repeated her remarks from Algeria, saying that while Italy wants to increase its profile in the region, it doesn’t seek a “predatory” role but wants to help African nations “grow and become richer.”

During the visit, Claudio Descalzi, the CEO of Italy’s state-run energy company, ENI, signed an $8 billion deal with Libya’s National Oil Corporation to develop two Libyan offshore gas fields. NOC’s chairman Farhat Bengdara also signed.

The agreement involves developing two offshore fields in Block NC-41, north of Libya and ENI said they would start pumping gas in 2026, and estimated to reach 750 million cubic feet per day, the Italian firm said in a statement.

Meloni, who attended the signing ceremony, called the deal “significant and historic” and said it will help Europe securing energy sources.

“Libya is clearly for us a strategic economic partner,″ Meloni said.

Saturday’s deal is likely to deepen the rift between the rival Libyan administrations in the east and west, similar to previous oil and military deals between Tripoli and Ankara. It has already exposed fractions within the Dbeibah’s government.

Oil Minister Mohamed Aoun, who did not attend the signing, criticized the deal on a local TV, saying it was “illegal” and claiming that NOC did not consult with his ministry.

Bengdara did not address Aoun’s criticism during his conference but said those who reject the deal could challenge it in court.

ENI has continued to operate in Libya despite ongoing security issues, producing gas mostly for the domestic market. Last year, Libya delivered just 2.63 billion cubic meters to Italy through the Greenstream pipeline - well below the annual levels of 8 billion cubic meters before Libya’s decline in 2011.

Instability, increased domestic demand and underinvestment has hampered Libya’s gas deliveries abroad, according to Matteo Villa of the Milan-based ISPI think tank. New deals “are important in terms of image,” Villa said.

Also, because of Moscow’s war on Ukraine, Italy has moved to reduce dependence on Russian natural gas. Last year, Italy reduced imports by two-thirds, to 11 billion cubic meters.

Meloni is the top European official to visit oil-rich Libya since the country failed to hold presidential and parliamentary elections in December 2021. That prompted Libya’s east-based parliament to appoint a rival government after Dbeibah refused to step down.

Libya has for most of the past decade been ruled by rival governments - one based in the country’s east, and the other in Tripoli, in the west. The country descended into chaos following the 2011 NATO-backed uprising turned civil war that toppled and later killed longtime autocratic ruler Moammar Gadhafi.

Piantedosi’s presence during the visit signaled that migration is a top concern in Meloni’s trip. The interior minister has been spearheading the government’s crackdown on charity rescue boats operating off Libya, initially denying access to ports and more recently, assigning ports in northern Italy, requiring days of navigation.

At a joint news conference with Meloni, Dbeibah said Saturday that Italy would provide five “fully equipped” boats to Libya’s coast guard to help stem the flow of migrants to the European shores.

Meloni needs to show “some kind of a step-up, compared to her predecessor in terms of migration and energy policy in Libya,” said Jalel Harchaoui, a Libya expert and an associate fellow at the Royal United Services Institute.

But “it will be difficult to improve upon Rome’s existing western Libya tactics, which have been chugging along,” he said.

The North African nation has also become a hub for African and Middle Eastern migrants seeking to travel to Europe, with Italy receiving tens of thousands every year.

Successive Italian governments and the European Union have supported the Libyan coast guard and militias loyal to Tripoli in hopes of curbing such perilous sea crossings.

Associated Press