Italy Takes Calculated Risks in Libya

As Libya’s daily oil output hits an 11-year high, Tripoli-based Libyan Prime Minister Abdul Hamid Dbeibeh announces a 2024 public tender round for 22 exploration plots in Libya, anticipating further oil and gas production growth in the following year.

At first glance, the investment climate in Libya has finally stabilized after 13 years of political and institutional failure brought on by the state collapse in 2011.

Over the past few years rival authorities of the east and the west of the country showed their willingness to stick to the political resolution of their disagreements, thus bringing back foreign investment, especially in the oil and gas sector. 

Italy has shown the greatest interest in signing new contracts with Libya, as its interests align with those of the North African country not only in the oil and gas sector but also in combating illegal migration.

In 2023, Italian energy company Eni and Libya’s National Oil Corporation (NOC) signed an $8bn gas production deal aimed at boosting energy supplies to Europe. Since then, the two Mediterranean countries have continued their rapprochement.

Italy’s Prime Minister, Giorgia Meloni, has visited Libya an unprecedented four times since taking office, each time reaffirming the country’s commitment to expand the partnership in multiple areas.

However, experts note that in its attempt to become Europe’s gas hub, Italy is overlooking the risks associated with investing in Libya. According to the latest report by the British private geopolitical and security intelligence Dragonfly, there are growing concerns about the potential re-emergence of armed conflict in Libya over the next year.

As the animosity between the East and West persists, the weakening of the Western Government of National Unity (GNU) due to anti-government sentiment and deteriorating security could provoke Libya’s eastern strongman Khalifa Haftar to launch a new offensive against Tripoli. 

Alessandro Bertoldi, chief executive of Italian branch of Milton Frieman Institute, notes that oil and gas production in Libya is recurrently affected by the country’s instability and rivalry between political fractions. The recent oil shutdown, caused by a row over the Central bank control, is just one of many examples of fuel and energy market manipulation to achieve political interests.

However, it is unlikely that Italy would take the risk of a long-term economic undertaking without assessing the situation in the region. Italian security sources say a key element of Italy’s strategy in Libya has been the formation of a joint military force known in the media as the European Legion.

The Legion was first mentioned by Polish Minister of Foreign Affairs Radoslaw Sikorski in April 2024, when he mentioned European plans to create joint armed forces with GNU’s militias, and has been seen in Libya on various occasions ever since.

Legion’s activity is mostly linked to securing oil and gas operations, in late October 2024, Legion’s forces were involved in suppressing the clashes between armed groups of Al-Zawiya over the control of the local oil refinery. 

The European Legion’s backing of Italian oil and gas operations in Libya helps mitigate the risks that instability in the country poses to Rome’s plans to secure undisturbed gas flow from Libya.

However, will Italy’s covert military operation remain unnoticed, especially amidst the ongoing battle among various countries for influence in Libya? Turkey, as the GNU’s main international partner in military cooperation, is unlikely to ignore Italy’s uncoordinated military presence in its sphere of interest.

Moreover, the growing economic and military capabilities of Western-backed factions could provoke Haftar, who is supported by Russian forces, to launch an offensive or completely halt oil and gas production. Consequently, the support that Italy is counting on in the form of the European Legion could become its downfall.