Noticed in today’s WSJ that Eni, the world’s sixth-largest oil company by market capitalization, announced a sweeping overhaul of its existing contracts with Libya’s National Oil Company, or NOC. According to the terms of the deal, Eni – which has been the largest foreign player in Libya for years – will be able to increase its production of oil and deepen its relationships in the North African country over the next several decades.

As the article notes:

“…Because years of political isolation crippled investment, Libya is now one of the few major oil producers capable of significantly ramping up production. The government has set an ambitious target of increasing its oil production by 40% over the next six years to three million barrels per day from about 1.8 million currently.

Libya’s reemergence coincides with soaring prices and a dwindling number of oil finds in other parts of the world — two factors that have given oil-producing nations, such as Kazakhstan, the upper hand in dealing with energy companies. Eni, for example, is also locked in difficult negotiations with the government of Kazakhstan over the management of the massive Kashagan project there.”

The two companies also agreed to increase gas export capacity to 16 billion cubic meters from eight billion currently. Eni and NOC are already partners in the Greenstream pipeline, which is capable of transporting to Sicily about eight billion cubic meters of gas a year, or around 10% of Italy’s annual gas consumption. Under the new deal, Greenstream’s capacity would be expanded by three billion cubic meters a year. The rest of the increase would come from the construction of a new liquefied natural gas plant capable of exporting five billion cubic meters a year to world-wide markets in the next 10 years.