European Companies Confirm Commitment to Operations in North Africa Despite Crisis in Mediterranean

While the European diplomacy and political elite gathered in Luxembourg on Monday to get ready for an extraordinary European Council on Thursday centred on the situation in the Mediterranean Sea in the aftermath of the latest migrant drownings off the coast of Libya, Spain’s Repsol and Italy’s ENI reiterated their commitment to operations in North Africa. 

Meanwhile, the daily La Repubblica reported that a mission to safeguard strategic infrastructures - including those in the oil and gas production areas - is one of the five options presented by EU Foreign Policy Chief Federica Mogherini to solve the crisis in Libya. 

DISCOVERIES IN ALGERIA, PRODUCTION IN EGYPT

Repsol made its third gas discovery in the Illizi basin, in southeastern Algeria, on the border with Libya. According to a note released on Monday, the Spanish company plans to drill other wells to appraise the previous discoveries within the Sud-Est Illizi block.

‘The discovery in Tan Emellel Sud-Ouest-2 (TESO-2) exploration well in the Sud-Est Illizi block is the continuation of an already very successful exploration campaign in the high-potential area’ the company wrote on its website. 

Repsol is the operator of the the licence, with a 52.5% stake. Italy’s Enel and France’s GDF-Suez are the partners, with 27.5% and 20% interest respectively. Algeria’s Sonatrach will then hold a 51% stake in the development and production phases, with the three European companies maintaining their existing proportions in the remaining 49%. 

Also on Monday, Eni wrote that it has doubled production in the Western Desert. The Western Desert covers about 700,000 square kilometres, spanning from the Nile River Valley to the Libyan border.

‘Eni reached a record level of production of 70 thousand barrels of oil per day in the Western Desert of Egypt, doubling its level of production in the area in just three years. Such result was achieved mainly thanks to the Melehia development lease, located 290 kilometers west of Alexandria’ the six-legged dog said on Monday, adding that it will start exploration activities on the deep plays in the Melehia Southwest block by the end of the year.

DIPLOMATIC ACTIVITIES: LYBIA, MIGRANT DROWNINGS 

European officials are discussing a common position on the situation in the Mediterranean. During the Foreign Affairs Council in Luxembourg - where Libya was the first item on the agenda - European heads of state spoke about the need to meet and discuss a concerted strategy to avoid more loss of lives in the Mediterannean.

“After what happened in the Mediterranean the night before last I felt it was our moral duty to concentrate our responsibility, as Europeans, to prevent this kind of tragedy from happening again and again” Mogherini said on Monday.

According to the document presenting options for the European Union to assist transition in Libya, one strategy is reportedly a mission to Libyan coasts. The paper, already prepared by Mogherini’s team before a boat capsized off the Libyan coast killing hundreds of migrants, envisages European warships in the area to combat oil and arms smugglers, according to Reuters. 

Also Donald Tusk, President of the European Council, took an active step to create the conditions for European leaders to meet.

“I have decided to call an extraordinary European Council this Thursday to address situation in Mediterranean” reads a tweet on his official channel. 

Additionally, also the UK voiced its interest to increase efforts to solve the migration issue. Prime Minister David Cameron - addressed by The Guardian on Monday as the head of the ‘cruellest British government in living memory’ - supported a knee-jerk reaction. 

“He agreed with both [Italy’s] Prime Ministers Renzi and [Malta’s] Muscat that the establishment of a National Unity Government in Libya was essential for a sustainable solution. The leaders welcomed today’s urgent meeting of Foreign and Interior Ministers in Luxembourg, and the Prime Minister backed Prime Minister Renzi’s call for an emergency European Council” Cameron’s spokesperson said in the afternoon.

The UK previously advocated to cut the main rescue operation Mare Nostrum to reduce costs. 

WHAT’S NEXT? 

The drowning of migrants off the coasts of Libya will have an impact on oil and gas operations, directly or indirectly. It is still unclear how. A strong European reaction could support oil and gas production in the area or further increase local tensions. On the other hand, it is crystal clear that an inconsistent approach from Brussels would affect European interests negatively. That is sure. 

Sergio Matalucci 

Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter: @SergioMatalucci