A weekend attack on an Italian diplomat in Libya dealt a serious setback to the government’s attempts to entice foreign investors to rebuild the war-ravaged North African country.

The attack on consul Guido De Sanctis, which Rome condemned as a “vile act of terrorism,” came four months after militants burned down the US mission in Benghazi and killed four Americans, including the ambassador.

“This attack will certainly be a reason of concern for many oil companies who are operating in Libya or planning to return to Libya,” the Tripoli-based analyst Claudia Gazzini of the International Crisis Group told AFP on Tuesday.

“It can have a negative impact on their decision to stay or return. This is negative because it comes at a time when the Libyan government is making a wholehearted effort to convince foreign companies to return.”

Libya was an Italian colony between 1911 and 1947. The two countries have established diplomatic relations since 1947 with Italy opening up an embassy in Tripoli and a general consulate in Benghazi. Libya has an embassy in Rome and 2 general consulates in Milan and Palermo.

While Libya was considered a pariah state by much of the international community under the rule of the late Muammar Gaddafi, Italy maintained diplomatic relations with Libya and exported a significant quantity of its oil from the country. Italy is also the biggest foreign investor in Libya’s energy sector.

In December after a post-revolution pause, Italian energy giant ENI announced it had resumed oil exploration in Libya, becoming only the second foreign firm to do so after Algeria’s Sonatrach.

According to AFP, Benghazi-based analyst and historian, Mohammed al-Mufti, said the attempt to assassinate De Sanctis was “an embarrassment for the authorities who need foreign investment to boost the economy.”

The shooting came two days after Mohammed Megaryef, president of the national assembly and Libya’s de facto head of state, travelled to Rome for talks with business leaders.

European trade delegations visit Tripoli periodically but many businessmen have adopted a wait and see approach, keen to see whether the interim government, which took office in November, can get a grip on security.

The French foreign ministry’s delegate for French nationals abroad, Helene Conway-Mouret, was in the Libyan capital last week to assess the situation and encourage French companies to do business.

“Security issues weigh on our companies,” she said in an address to Tripoli’s French community, which remains small and male-dominated in the absence of wives and children.

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