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BP returns to Libya in $900 mln deal

Oil giant BP has announced that it has struck a deal to return to Libya after an absence of more than 30 years.

CEO Tony Hayward said the $900 million (£453 million) joint venture with the Libya Investment Corporation was BP's „biggest exploration commitment”. The group will explore about 54,000 square kilometers - at the onshore Ghadames and offshore Sirt basins. The announcement was made during Prime Minister Tony Blair's visit to the Libyan capital, Tripoli.

BP withdrew from Libya in 1974, when its oil industry was nationalized. „We are now beginning to develop an economic relationship with Libya,” Blair's spokesman said. „That's why companies such as BP can begin to go back into the country today.” Hayward said that BP was „delighted” to be working with the state-owned National Oil Company of Libya, „to develop their natural resources for domestic and international markets”. „Our agreement is the start of an enduring, long-term and mutually beneficial partnership with Libya,” he added.

The deal is the latest stage in Libya's gradual return to the international fold since the US lifted its sanctions in 2004. Royal Dutch Shell signed a contract two years ago to return to Libya. That deal was timed to coincide with Blair's first visit to the country. BG Group has also been awarded exploration and production rights in Libya. (BBC.com)