Some of Libya’s oil contracts will be reviewed by the country’s new government, former interim prime minister Ali Tarhouni said Thursday, putting scores of foreign firms on notice.

During a visit to Washington, Tarhouni–a former oil minister and current adviser to the National Transitional Council–said some of the contracts agreed by the regime of Moammar Gadhafi would have to be reworked.

"It is my expectation that most contracts will be honored, but all will be revisited," Tarhouni said.

"Some of these contracts will be disputed, there are some that have these gross violations, there are some that are good," the U.S.-educated economist added.

Almost a year after Libya’s revolution began, there is still considerable uncertainty about the future of the energy sector and which role long-resident foreign firms will play.

Gadhafi’s ouster has created opportunities for companies hoping to see a redistribution of oil contracts to the benefit of countries that took part in the military campaign to overthrow the long-time dictator, threatening existing contracts.

Current interim prime minister Abdel Rahim al-Kib issued a statement in December indicating that contracts with Italian energy major ENI would be reviewed, before that notion was dispelled by his office.

The transitional government has said that no major decisions, including a reworking of Libya’s decades-old oil law, will be made until an elected government is in place.

In the meantime firms like ENI have resumed production.

The Italian firm has resumed up to 70% of its pre-conflict output in Libya, of around 200,000 barrels per day.

The company has been in Libya–a former Italian colony–since 1959 and is the biggest foreign energy producer in the oil-rich North African country.

In 2010, Libya’s capacity was just short of 1.7 million barrels per day, according to the International Energy Agency.

The country’s low-sulfur crude is much sought after by refiners.

Libya’s oil minister Abdel Rahman bin Yezza recently predicted that Libya would be back to full pre-crisis production levels in the second half of 2012.

Source: Rigzone & Dow Jones