The partners aim to restart exploration activities in the contractual areas. Credit: Lindsey G.

Italian firm Eni has signed a letter of intent (LOI) with Libya’s state-owned National Oil (NOC) and BP to acquire half of BP’s interest in an oil and gas licence in the North African nation.

Once the transaction is completed, Eni will hold a 42.5% interest in BP’s Exploration and Production Sharing Agreement (EPSA) in Libya. The companies aim to resume exploration activities next year.

BP will retain a 42.5% stake in the EPSA, while the remaining 15% will be owned by the Libyan Investment Authority.

As part of the deal, Eni will also assume operatorship of the EPSA, which comprises two onshore contract areas in the Ghadames basin and one offshore area in the Sirt basin, covering an aggregate area of around 54,000km².

Eni CEO Claudio Descalzi said: “This is an important milestone that will help to unlock Libyan exploration potential by resuming EPSA operations that have remained suspended since 2014.

“This is an important milestone that will help to unlock Libyan exploration potential by resuming EPSA operations that have remained suspended since 2014.”

“It contributes towards creating an attractive investment environment in the country, aimed at restoring Libya’s production levels and reserve base by optimising the use of existing Libyan infrastructure.”

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BP originally signed the EPSA contract in 2007. The company stopped work on the contract areas in 2014 and work has not resumed since.

Eni and BP intend to finalise and execute all necessary agreements by the end of this year.

Restarting exploration activities in the contract areas is subject to completion of the transaction and receipt of relevant regulatory approvals.

BP group chief executive Bob Dudley said: “This is an important step towards returning to our work in Libya. We believe that working closely together with Eni and with Libya will allow us to bring forward restarting exploration in these promising areas.”

The onshore areas of the EPSA are located in proximity to Eni’s existing exploration and production infrastructure.