Gazprom set for move into N Africa
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03/04/2008
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Financial Times (London)
Gazprom, Russia's state-owned gas group, is likely to secure energy assets in Libya alongside Eni gaining a long sought entry to north African oil and gas fields and tightening its grip on European markets. Paolo Scaroni, the Eni chief executive and Alexei Miller, the head of Gazprom, discussed the idea during talks in Moscow last Thursday, the Italian said in a statement disclosing the location of the assets. Industry sources said Eni had agreed to share assets with Gazprom "in a north African country, probably Libya'. An advance by Gazprom into Libya, one of the oil and gas producers in north Africa with the most potential, will raise alarm bells that it is tightening its stranglehold on European markets. Europe, dependent on Gazprom for more than a quarter of its gas supplies, views north Africa as an alternative source of gas to Russia. Eni, the leading foreign operator in Libya, recently agreed to double capacity in an 8bn cubic metres per year pipeline carrying Libyan gas across the Mediterranean to Italy. The company plans to invest $28bn in the coming decade, boosting production at its existing Libyan fields and exploring nearby areas. Gazprom has been aggressively hunting for assets in north Africa, one of a shrinking number of places where international oil groups have not yet been sidelined by increasingly assertive state oil companies. Talks with Sonatrach, Algeria's state oil company, about a possible partnership opened in 2006, but have made little progress. However, the prospect of an alliance between Russia and Algeria, the European Union's two biggest gas suppliers, has fuelled European fears about energy security. More recently Gazprom has offered to invest billions of dollars in gas projects in Nigeria where it is competing against western companies to build a 4,128km gas pipeline. Copyright The Financial Times Limited 2008