Shockwaves from Libya hit Italian business

By Agence France-Presse
Monday, February 21, 2011 16:22 EDT
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MILAN – Shockwaves from the unrest in Libya on Monday hit its former colonial overlord Italy — a top foreign investor in Libya and a country in which the North African state has also invested billions.

Libya’s sovereign wealth fund and veteran ruler Moamer Kadhafi’s family own stakes in Italy’s biggest bank UniCredit, defence and industry giant Finmeccanica, as well as in the first-division Juventus football club.

Shares in UniCredit plunged 5.75 percent by close of trading in Milan.

Libya is Unicredit’s top shareholder with a 7.5-percent stake and Libyan central bank governor Farhat Omar Bengdara is also Unicredit’s vice-president.

Shares in energy major ENI, which has been in Libya since 1959 and produced 244,000 barrels of oil equivalent per day in 2009, also dropped 5.12 percent.

Libya accounts for around 14 percent of ENI’s global output and the company is the biggest energy producer in the turmoil-hit North African state.

“For the moment, no problem has been registered at the installations or on operational structures,” the Milan-based giant said in a statement.

“Production is continuing normally with no impact on operations,” it said.

But the company said it had already begun pulling out all “non-essential” international staff, as well as the families of all expatriate employees, as well as increasing security “for personnel and installations” in Libya.

Finmeccanica, which is two-percent owned by Libya’s sovereign wealth fund, also said it was pulling its few expatriate employees out of the country.

“Fewer than 10″ employees were being repatriated, a company source said.

The company’s shares fell 2.69 percent in Milan.

Industry giant Impregilo, which has several major contracts in Libya, saw its shares plummet 6.09 percent — the worst performer on the stock market, where the benchmark FTSE Mib index was down 3.59 percent.

Italy-Libya ties have deepened since a treaty signed in 2008 in which the two countries promised billions of euros (dollars) in mutual investments, as well as a Libyan clampdown on illegal immigration towards Italian shores.

Italy is now the biggest exporter to Libya and the biggest importer of Libyan goods. According to the latest data available for 2009, Italy is the fifth largest foreign investor in Libya, excluding the oil and gas sector.

Concern meanwhile spread to Libya’s foreign investor community as a whole, with Norwegian energy giant Statoil saying it had begun evacuating international staff and Britain’s BP saying it was preparing to do the same.

“Our local headquarters (in Tripoli) is closed,” Statoil spokesman Baard Glad Pedersen told AFP.

“The handful of international staff has already left or is in the process of leaving the country,” he added.

Statoil holds stakes in two Libyan oil fields, Mabruk and Murzuq.

Pedersen refused to comment on whether production continued on the two fields despite the ongoing violence in the country.

“It is generally up to the operators, in this case Total and Repsol respectively, to communicate about the status of operations,” he said.

French oil giant Total said Monday it was repatriating most of its expatriate employees and their families from Libya with some staying behind “with reinforced security measures”.

British energy major BP, which is set to begin drilling in Libya this year, meanwhile said it was making preparations to evacuate some of its staff.

The company has about 140 staff in the country, mostly in Tripoli, about 40 of whom are expatriates, he said.

Some of those being prepared for evacuation were crew making drilling preparations in the west of the country in Ghadames, and as a result these preparations were being suspended.

“We are many years away from production, we haven’t drilled a single well there yet,” a BP spokesman added.

A 2007 accord with Tripoli allows BP to drill five wells in the Gulf of Sirte at depths of around 1,700 metres (5,500 feet).

The deal has faced US criticism, with suspicions that BP pressed for the release on compassionate grounds of the Lockerbie bomber — something the oil giant denies.

Libyan Abdelbaset Ali Mohmet al-Megrahi is the only person ever convicted of blowing up a US airliner over the Scottish town of Lockerbie in 1988, killing 270 people, mostly Americans.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
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