Libya’s National Transitional Council has launched an inquiry into oil contracts signed with foreign companies during the last years of the Gaddafi era, Corriere della Sera reports. The investigation focuses on alleged corruption of Libyan officials from 2008 and 2011, and involves, among others, two of Europe’s largest energy firms, Italy’s ENI and France’s Total.

The inquiry comes in the week after the US Securities and Exchange Commission opened a similar procedure. If convicted, companies could face massive fines and see their current and future contracts with the new government declared null and void. According to the Wall Street Journal, the investigation “casts a cloud on the companies' ambitions to expand their foothold in the country with the largest oil reserves in Africa”.

ENI, in particular, was the biggest operator in Libya under the rule of Muammar Gaddafi and quickly recovered its lead after the regime change, with a current output share of about 14 per cent. The company was planning to invest over $30 billion (€22.9 billion) to double that figure over the next decade.