Eni SpA, the largest foreign oil producer in Libya, fell the most in 19 months in Milan trading, and BP Plc (NYSE:BP) suspended exploration because of worsening violence in the North African country.
Eni, which produced 244,000 barrels of oil equivalent a day in Libya in 2009, fell 5.1 percent, the most since July 2009. The company said in a statement that production is continuing as normal. BP has no producing assets in Libya and is evacuating families and non-essential staff, said David Nicholas, a spokesman for Europe’s second-largest oil company.
Libya holds the largest crude oil reserves in Africa and oil prices rose to a two-year high today. Saif al-Islam Qaddafi called on protesters against his father Muammar Qaddafi’s 41- year rule to engage in dialogue or face a civil war that risks the country’s oil wealth, warning that “rivers of blood will flow” if demonstrations continue.
“The violence is unsettling and it’s definitely right to be cautious,” said Jason Kenney, head of oil and gas research at ING Wholesale Banking in Edinburgh. “It seems like Eni is most at risk. The gas coming into Europe is quite significant, so it’s a concern.”
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