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Eni Committed To Libya Even As Output Slumps: CEO
13/11/2013
MILAN (Reuters) - Italian oil and gas group Eni remains committed to Libya even though mounting political turmoil has slashed its production there, the chief executive told the BBC on Wednesday.
"We have been producing in Libya in 2013 roughly 60 percent of what we should have been producing," Paolo Scaroni said in an interview with the BBC programme Hard Talk.
Eni, the biggest foreign oil and gas producer in Libya, was producing around 270,000 barrels of oil equivalent per day before the overthrow of Muammar Gaddafi in 2011.
Armed militias and groups of protesters in Libya in recent months have forced closures of oilfields, ports and pipelines and shut most of its production capacity.
But Scaroni said Libya has the potential to become an energy producer like Qatar or Kuwait.
"It's very much out of control ... It's getting worse ... but I have reasons to be optimistic on the future," he said.
State-controlled Eni is the biggest foreign oil major in Africa, where it produces around 57 percent of its overall output. In October it cut its production outlook to reflect shrinking volumes from Libya and Nigeria.
Scaroni reiterated the company was losing around 30,000 barrels per day in Nigeria because of theft, or bunkering.
He said Eni would defend itself "very well" against accusations by Amnesty International that it had not reported correctly the amounts and causes of oil spills in Nigeria.
"I hope the Nigerian parliament takes more care on bunkering and order in the swamps," he said.
Nigerian legislators are considering a law that would impose new fines on operators responsible for oil spills.
"The problem of bunkering is a key problem of Nigeria ... and a reason why all major oil companies are thinking of quitting Nigeria," Scaroni said.
Asked whether Eni could be affected by a probe into alleged corruption by oil services group Saipem in Algeria, Scaroni said he felt "pretty comfortable".
"Algeria ... is showing such a positive attitude towards Eni and in particular towards me... and nothing of that would have happened if the Algerians had the slightest idea I am involved," he said.
Saipem, 43 percent owned by Eni, is embroiled in judicial investigations in Italy and Algeria into allegations it paid bribes to secure contracts.
Scaroni has been told he is under investigation but denies any wrongdoing. Eni is also the leading foreign energy operator in Algeria.
The Eni CEO also said Europe needed to draw closer to Russia from an energy point of view because of its massive reserves, its proximity and its existing pipeline network.
"Either we embrace fracking or we embrace Russia," he said, referring to the use of hydraulic fracturing to produce gas and oil from shale, a technology that has been controversial in Europe.
Eni has a strategic alliance with Gazprom and is Russia's biggest natural gas client.
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