BP and its Libyan partner, the Libya Investment Corporation (LIC), today signed a major exploration and production agreement with Libya's National Oil Company (NOC). The initial exploration commitment is set at a minimum of $900 million, with significant additional appraisal and development expenditures upon exploration success.

The agreement was signed today in Sirt, Libya, by BP's group chief executive Tony Hayward and NOC chairman, Shokri Ghanem.

During this exploration and appraisal phase, BP will acquire 5,500km of 2D seismic and 30,000km2 of 3D seismic and will drill 17 exploration wells.

"We are delighted to be working with the 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," said Tony Hayward, BP group chief executive.

"With its potentially large resources of gas, favourable geographic location and improving investment climate, Libya has an enormous opportunity to be a source of cleaner energy for the world," said Hayward.

"This is a welcome return to the country for BP after more than 30 years and represents a significant opportunity for both BP and Libya to deliver our long term growth aspirations," said Hayward. "It is BP's single biggest exploration commitment."

BP will spend $50 million on education and training projects for Libyan professionals during the exploration and appraisal period, and, upon success, a further $50 million from commencement of production. The education and training programmes will be designed and managed in partnership with the NOC.

"The agreement reached today is a great success for Libya, the NOC and also for BP," said Hayward.

© 2007 Mena Report (www.menareport.com)