Paolo Scaroni, the CEO of Eni SpA, Italy's largest oil company, warned against allowing the situation in Libya, home to Africa's largest oil reserves, escalate to the point where the country becomes a failed and starts bearing resemblance to Somalia.
''What would be the worst potential outcome is to have a kind of Somalia situation in Libya that has no government for a long period of time,'' Scaroni said in an interview with Bloomberg Television on Friday. Scaroni was also careful to say that under that scenario, the impact would be felt throughout Europe, not just at Eni.
Eni (E), which has been doing business in Libya for over five decades and has the largest presence in the North African country of any Western oil company, has seen its Libyan output slashed to 100,000 barrels of oil equivalent per day from 270,000 barrels per day before the onset of political violence. Scaroni said higher oil prices are helping make up for the lost Libyan output, Bloomberg reported.
The company announced last week that it is planning to spend $74 billion over the next three years on exploration and production projects. Eni, which has the largest presence in Africa of any Western oil company, is looking to projects in countries such as Angola, Iraq, Russia and Venezuela to help it boost output by 3% annually over the next four years.