Business, Economics and Jobs

Italian oil company leads charge back into Libya

Oil companies wasted no time in capitalizing on the final throes of Libya's power struggle, as rebels battled with the forces of Muammar al-Gaddafi across Tripoli on Monday.

Italy's Eni, the top oil producer of pre-war Libya, had already arrived in the country to restart oil facilities in the country's east, as fighting between government troops and the rebels continued in Tripoli in the west, Reuters reports, citing Italian Foreign Minister Franco Frattini.

(GlobalPost reports: Libya: rebels hold most of Tripoli)

Eni on Monday hailed the end of Gaddafi's rule and warned Russian and Chinese firms of contract revisions. Reuters reports:

Gaddafi's fall will reopen the doors to the country with Africa's largest oil reserves. New players such as Qatar's national oil company and trading house Vitol are set to compete with established European and U.S. majors.

"We don't have a problem with western countries like Italians, French and U.K. companies. But we may have some political issues with Russia, China and Brazil," Abdeljalil Mayouf, information manager at Libyan rebel oil firm AGOCO, told Reuters.

Russia, China and Brazil opposed tough sanctions on Gaddafi or pressed for more talks. The stance taken by Libya's rebel leadership signals a potential loss of billions of dollars worth of oil exploration and construction contracts for those nations.

Before the uprising against Gaddafi, who has ruled Libya for four decades, the OPEC member produced about 2 percent of global oil output, and it has reserves to sustain an output of 1.6 million barrels per day for 80 years, Reuters reports.

During the Libya conflict, however, oil "output has fallen more than 90 percent as oil workers were evacuated and transportation was disrupted," VOA reports.

Gaddafi's imminent ouster, after months of fighting in the country, had little positive impact on oil prices, however, reflecting "legitimate uncertainty over what comes after Gaddafi," according to the WSJ. 

After falling sharply early Monday, Brent crude prices recovered some ground but were down by about $1.25, or 1.2 percent, by midday London time, at $107.25 per barrel, the WSJ reports. 

Brent is the benchmark price for about half the world's oil. 

Meanwhile, shares in the European oil firms — Eni, Austria's OMV and France's Total — rose by 3 to 5 percent on Monday "on hopes the firms would be able to quickly re-establish output from Libya," Reuters reports.

"It is clear that Eni will play a No. 1 role in the future," Frattini reportedly told state TV RAI.