Libyan National Oil Corporation (NOC) demanded, in a statement regarding the confusion surrounding the negotiations with the Italian company Eni, not to be involved in political conflicts, adding that no other authorities or bodies are allowed to speak for the NOC matters.
Bashagha said in a statement on Tuesday that Eni was seeking to change the percentage of participation with the NOC in Mellitah Oil and Gas Company, warning of what he called “exploitation and entering into suspicious deals.”
He also said that the agreement would lead to an increase in the shares of the foreign partner at the expense of the national one.
The NOC said that the percentage that some parties are talking about is not the one of sharing in revenues, but rather the permissible percentage of capital costs in the project, that is, the percentage of production to recover the capital costs of the project.
The NOC indicated that this percentage was in the agreement signed in 2008 with 40% of the production, starting from the date of the commercial announcement to start the project and decreasing to 30% after ten years, which is the estimated period for cost recovery, noting that the commercial announcement of the project took place in 2013, but for several reasons, it has not been implemented to this day.
“The implementation of the project should be a priority, and we call on Eni to implement it. After many meetings, Eni responded and demanded that an agreement be reached first on the components of the project to determine the costs of its implementation before delving into the economic feasibility.” The statement reads.
It adds that after agreeing on the components of the project, the company asked to amend the cost recovery rate from 40% to 45%.
“A team of experts was formed to negotiate and agreed to amend the recovery rate from 40% to 38%. It will be reduced to 37% if the project costs fall below $7 billion. It will increase to 39% if the project costs exceed $8 billion, and returns to 30% ten years after the start of project implementation.” the NOC remarked.