Libya Buying into ENI?

Libyan officials have said recently that they are interested in acquiring up to 10% of ENI, the Italian oil major. Such a deal might make sense for a number of reasons. ENI shares have been beaten down along with those of other energy companies. Buying into ENI would be a bargain. Moreover, ENI is Libya’s most important partner in the oil and gas industry with average daily oil and gas production in excess of 550 thousand barrels per day of oil equivalent. ENI remained in Italy throughout the long sanctions period.

ENI recently signed a new deal with Libya extending its concessions through 2047. ENI will invest as much as $28 billion in Libya. Shukri Ghanem, the CEO of Libya’s National Oil Co. and his counterpart at ENI, Paulo Scaroni, seem to get on famously. The two recently held what was billed as a “debate” in London, but it seemed more of a lovefest. “We understand each other; our characters are similar, Ghanem said.” Scaroni has gone out of his way to accommodate the needs of the countries ENI works. ENI is willing to go to great lengths to accommodate its partners. Such efforts include building power plants, agricultural projects, and schools and clinics.

Ghanem also talked about the need for more cooperation between the international oil companies such as ENI and the national oil companies. He said he wouldn’t be surprised to see a merger between two such companies taking place. Maybe that is where this relationship is heading.
Businessweek