BP returns to Libya for first time since fall of Gaddafi
The energy giant has signed an agreement with Libya's National Oil Corp (NOC) to search for oil and gas at three sites in the country. BP will also reopen its office in Tripoli, the Libyan capital, NOC said on Monday.
Rival Shell has signed a similar deal, although its plans are said to be less advanced.
BP has a long and chequered history of involvement in Libya, having discovered some of its biggest oilfields in the 1950s and 1960s, only to see them nationalised by Gaddafi in 1971.
In 2007 Tony Blair helped the company sign a $900m (£663m) exploration and production deal with the Libyan leader. That deal proved to be hugely controversial amid claims that BP had lobbied for the release of the Lockerbie bomber in return for access to Libya's oil riches.
Abdelbaset al-Megrahi, the only person convicted of bombing Pan Am Flight 103 over Lockerbie in 1988, which killed 270 people, was released from Scottish prison in 2009 on compassionate grounds while suffering from terminal prostate cancer.
He died in 2012 at his home in Tripoli.
The decision angered the US, with then-president Barack Obama branding it 'a mistake'. Hillary Clinton, the US secretary of state at the time, subsequently pressured the UK government to investigate and explain BP's alleged role in the release.
BP admitted in 2010 that it had raised the issue with the government. It said: 'BP told the UK government that we were concerned about the slow progress that was being made in concluding a Prisoner Transfer Agreement with Libya.
'We were aware that this could have a negative impact on UK commercial interests, including the ratification by the Libyan government of BP's exploration agreement.'
However, David Cameron insisted at the time that this lobbying played no role in the Scottish executive's decision to release Al-Megrahi. He said: 'That was not a decision taken by BP, it was a decision taken by the Scottish government.'
The Scottish executive has also denied BP played a role in Al-Megrahi's release and a US state department review of its records found no evidence to support that claim the oil company was involved.
Return to Libya
BP's operations in Libya were ultimately put on hold because of growing unrest that led to the dictator's demise in 2011. The company has not restarted operations since.
Its return to Libya could be highly significant for BP, which is facing increased debts and an underperforming share price.
Libya has major reserves of oil and gas and was the third-largest producer of petroleum liquids in Africa in 2023, after Nigeria and Algeria. The country owns 3pc of the world's proven oil reserves and 41pc of Africa's proven oil reserves.
Political and military conflicts since 2011, often involving armed rival factions battling over oil revenues, have led to frequent oilfield shutdowns and scared away investors.
The last two years have seen a gradual return, with oil giants such as Eni, OMV and Repsol resuming tentative exploration efforts.
William Lin, BP's executive vice president, said the company had signed an agreement to look for opportunities in the giant Sarir and Messla oilfields in Libya's Sirte basin, as well as in adjacent areas. It will look at the potential for fracking in other locations.
He said: 'We hope to apply BP's experience from redeveloping and managing giant oilfields around the world to help optimise the performance of these world-class assets.'
Masoud Suleman, chairman of Libya's NOC, said he wanted BP 'to play a greater and a more significant role in developing the country's oil sector.'
BP under pressure
Separately, the state oil firm said it had reached an agreement with Shell to evaluate hydrocarbon prospects and conduct a comprehensive technical and economic feasibility study to develop the Atshan oilfield and other fields that are fully owned by NOC.
The NOC wants to increase Libya's oil output from 1.3m barrels a day to about 2m, well above the country's peak production of 1.8m barrels achieved in 2006.
The deal with BP comes as the oil giant battles to turn around performance. The company has been under pressure from activist investor Elliott Management to ditch green energy projects and refocus on oil and gas.
BP has become the subject of takeover speculation because of its weak share price. Shell, its arch rival, was last month forced to deny it was preparing a bid.
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