The regime of the strong man Muammar Abu Minyar al-Gaddafi appears to have failed. For American investors, there are no easy direct investment opportunities in Libya. Fortunately, there is a gem that trades in the good old USA that investors may want to keep on their watch list. The gem is ENI SpA (E), an Italian company that trades on NYSE.
Libya is a tribal society, and it appears that fracturing of the country along tribal lines is a strong possibility. To properly time entry into the investments described below, investors will need to develop a basic understanding of the geography of Libya. The map shows the situation as it exists now.
Eni is the much storied Italian oil and gas company with a long history in Libya. The map shows the geographic proximity of Italy to Libya, which was once an Italian colony. Eni has been operating in Libya since 1959. Eni’s net production from Libya is 108 kbbl/d of liquids and 780 mmcf/d of natural gas. These are substantial numbers by any means.
A brief look at the geography of Eni activities in Libya is in order. Eni has four main producing fields in Libya – El Feel, Bouri, Bu Attifel, and Wafa and Bahr Essalam.
El Feel produced approximately 110,000 barrels per day in 2009. This field is located 800 kilometer from Tripoli in the southwest region of the desert.
Bouri produced approximately 45,000 barrels per day in 2009. This field is offshore in the Mediterranean Sea in front of Tripoli.
Bu Attifel produced approximately 14,000 barrels per day in 2009. This field is located in the eastern desert.
Wafa and Bahr Essalam contain both onshore and offshore facilities.
These are the most important fields for Eni and are located in western Libya. Due to significance of these fields, little bit deeper understanding is helpful in analyzing the news flow from Libya. These fields, for the time being, are likely to stay under the control of Gaddafi. These are natural gas fields. The gas produced is sold in Libya and exported to Europe. The gas is transported to Italy along the GreenStream pipeline. In 2009, Wafa Essalam produced 148,000 barrels of oil equivalent per day (boe/day) of liquid and natural gas (about 112,000 barrels net to Eni). The gas from Bahr Essalam is transported to the Mellitah treatment plant, where the majority is sent to Europe along the GreenStream pipeline. In 2009, approximately nine billion cubic meters was exported to Europe. Also, one billion cubic meters were sold for generating electricity in Libya, and an additional 200 million cubic meters were used for fueling the GreenStream compression station.
At this point, the stock meets only three of the six screens. If and when it meets more screens we will provide a buy signal in real-time on the Real Time Feed of the ZYX Buy Change Alert.
