TRIPOLI, Libya, Sept. 7 (UPI) -- Italy's top oil company has signed a deal with Libya's rebel government to take the lead in a race by international oil companies to secure access to the country's oil and natural gas reserves and contracts worth billions of dollars.
The prospects for China, which has been snapping up energy deals across Africa and the Middle East to fuel its burgeoning economy, have been severely dented by disclosures it offered to sell weapons worth $200 million to Moammar Gadhafi's regime to avert his downfall.
Libya has Africa's largest known oil reserves, totaling 46.4 billion barrels, plus natural gas reserves of 55 trillion cubic feet.
China is the third largest importer of Libyan crude. Libyan oil production was reduced and eventually cut altogether during the six-month civil war.
"We don't have a problem with Western countries like the Italians, French and U.K. companies," declared Abdeljalil Mayouf of the rebel oil firm Agoco. "But we may have some political issues with Russia, China and Brazil."
These were all inclined toward the Gadhafi regime and opposed NATO intervention to aid the rebels.
Estimates vary on how long it will take to restore pre-war output of 1.6 million barrels per day of highly prized light, sweet crude. That's worth about $1.3 billion a week at current prices. The most optimistic estimate is 18-24 months.
But much will depend on whether the rebel coalition, which includes Islamists, nationalists and tribal groups, can remain cohesive.
If, as some analysts fear, the National Transitional Council, fragments, the international oil companies could find it difficult, if not dangerous, to operate.
Private security companies are already hustling contracts to protect desert oilfields, possibly from pro-Gadhafi diehards.
But the NTC is likely to sign deals as swiftly as it can because it needs the foreign companies to get the energy industry working again as soon as possible.
The rebels also need the companies to explore new fields in a bid to boost production, possibly up to the pre-Gadhafi peak of 3 million bpd reached in the 1960s.
That should give BP an edge since it was ready to begin deep-water drilling in the Gulf of Sidra under a controversial $900 million deal before the fighting erupted.
Major offshore strikes would be a massive boost to Libya's reserves and the NTC could be expected to want that much-delayed project to proceed as fast as possible.
Libyan officials reported at a "Friends of Libya" gathering Friday in Paris that at least five foreign oil and gas companies are back in the country to work on restoring the energy industry while the NTC consults with the United Nations and others on stabilizing the country.
ENI, the largest producer in Libya before the civil war began in February, is one. The other companies have yet to be identified but Spain's Repsol and France's Total, which both had operations in Libya before the war, are likely to be close behind ENI.
Total is likely to be secure because of France's staunch support for NATO intervention to aid the rebels.
ENI signed a deal with the NTC Aug. 29 to restart oil and gas operations and supply refined products to the NTC to meet domestic needs.
The company sought a swift agreement because of concerns it would lose out to rivals because of Rome's initial reluctance to support the rebels fighting Gadhafi, with whom the former colonial power had strong links.
"The memorandum … is confirmation of the solid relations between ENI and the NTC who are evaluating various possible forms of cooperation to ensure the timely resumption of operations in the oil and gas sector," ENI said.
The deal was struck after a meeting in the eastern city of Benghazi, a rebel stronghold, between the NTC and ENI Chief Executive Officer Paolo Scaroni, the first foreign oil chief to visit Libya since the rebels seized Tripoli.
The Italian oil giant, which has holdings in the east, has operated in Libya since 1959. Libyan oil accounts for 13 percent of its revenue.
New players like the national oil company of Qatar, which backed the rebels almost from the start of the conflict, are likely to secure lucrative deals.
U.S. companies like ConocoPhillips, Marathon and Occidental pulled out early in the conflict and are reported to have had little contact with the NTC.