Protests halt oil production in Libya as Italy signs energy deal

Protestors at Libya’s Melitta oil depot caused major disruption to oil and gas production on Saturday, while Libya’s Tripoli-based government was finalising an $8bn deal with Italian energy giant Eni to increase exports. 

“The Mellita complex has been stormed by protestors who have made it to the control centre,” said the Union of Mellita oil and gas workers in a post on facebook on Saturday.  

Oil sources told local Libyan media that pressure to Italy decreased by 50% as negotiations with the protest continued.  

Protests across Libya’s oil facilities have been endemic for several years, as different factions fight over the allocation of export proceeds. 

Meanwhile, Italian energy giant Eni was in the process of signing an $8 billion gas deal with Libya's state-run National Oil Corporation on Saturday as Prime Minister Giorgia Meloni visited Tripoli.

European governments have been scrambling to find alternatives to Russian gas since last year's invasion of Ukraine saw deliveries slashed to less than half their pre-war levels, sending prices soaring to record highs.

Eni said it was the first major project in Libya since early 2000 and involved the development of two offshore gas fields.

A key promise in new deals with any European partners will be to guarantee the security of export facilities and to ensure stable supply. 

Throughout 2022, Mellita was struck by regular protests and ‘forces majeure’ announced by the National Oil Company - currently aligned with the Tripoli-based government of Abdulhamid Dbeibah. 

Despite disturbances, Libya's oil revenues rose to 105.5 billion Libyan dinars ($22.01 billion) in 2022 from 103.4 billion Libyan dinars in 2021

Oil and gas exports are still well below levels seen before Libya descended into a lost decade of civil war.