Eni deposit in Libya of interest to Gazprom not seriously damaged
MILAN. Oct 6 (Interfax) - Italian energy company Eni has not yet observed any significant damage caused by military conflict to the Elephant deposit in Libya, which Gazprom has its eye on, Eni told Interfax.
"We are still looking over the deposit, but at this moment we have not seen any significant damage," a company source said.
The two companies signed documents paving the way for Gazprom to join Eni's Elephant project in the middle of last month.
An agreement was signed "that confirms the signed agreements of February 16, 2011, which effect the transfer to Gazprom of 50% of Eni's stake (33%) in the consortium working the Elephant deposit in Libya," the source said.
As reported, the two companies took part this February in signing ceremonies for documents on the sale of this asset, but in fact the agreement was not fully signed. For it to take force, it has to be approved by the Libyan government, which was not possible due to the outbreak of civil war. The power transfer from the Muammar Gaddafi regime to the National Transitional Council raised doubts that the new authorities would affirm readiness to work with Russia.
As reported, the parties are to sign a call-option for the acquisition of the Elephant stake, but it is unclear in what shape the asset is in as a result of the fighting. The basic appraisal is still $163 million. That will be reduced to the degree in which the asset was damaged during the conflict, and by the amount of profits Gazprom Neft lost out on during the time the project was frozen.
The Elephant field, which went commercially on-stream in 2004, lies 800 kilometers south of Tripoli. The project is being carried out by a consortium of Eni (66%) and Korean National Oil Corporation (33%). Gazprom Neft was to have received a 33% stake in the multinational consortium.