Eni, Gazprom Put Libya Project On Hold

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Eni SpA, Italy's largest oil company, and Gazprom, the world's largest natural gas producer and one of Russia's largest companies, said they will temporarily put a Libyan project on hold as political unrest in the North African country continues after starting nearly two months ago.

Eni (E) sold a 33% stake in the Elephant oilfield to Gazprom in February for $170 million just days before violence broke out in Libya, Africa's third-largest oil producer behind Angola and Nigeria. The project had been approved by both companies, but was awaiting approval from Libyan authorities.

The two companies said in a statement issued today that Eni has, ''due to the ongoing situation in Libya" decided to keep Gazprom's involvement ''on temporary hold.'' Eni would not comment on the possibility of Gazprom withdrawing from the deal due to the hold.

Eni has the largest footprint of any Western oil major operating in Libya and the company's output has been crimped by the violence there. Last month, Eni saw 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.