Italian oil company Eni has agreed to acquire a 42.5% interest in the BP-operated exploration and production sharing agreement (EPSA) in Libya, as part of a deal signed on Monday that will see the two oil companies resume exploration works in Libya.
A letter of intent was signed on Monday in London by National Oil Corporation chairman Eng. Mustafa Sanalla, BP group chief executive Bob Dudley and Eni chief executive officer Claudio Descalzi.
Once the transaction has been completed, Eni will become the operator of the exploration and production sharing agreement (EPSA) in Libya. BP currently holds an 85% working interest in the EPSA, with the Libyan Investment Authority holding the remaining 15%.
The EPSA consists of three contract areas, two in the onshore Ghadames basin and one in the offshore Sirt basin, covering a total area of around 54,000 km2. Originally awarded in 2007, work on the EPSA has been suspended since 2014.
NOC chairman Mustafa Sanalla said: “This agreement is a clear signal and recognition by the market of the opportunities Libya has to offer and will only serve to strengthen our production outlook. The agreement’s social development guarantee is an important sign of our joint commitment to our staff and the communities in which we work. This initiative will hopefully drive further inward investment and facilitate higher production levels.”
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.”
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. It contributes towards creating an attractive investment environment in the country, aimed at restoring Libya’s production levels and reserve base by optimizing the use of existing Libyan infrastructure.”
As part of the LOI, the signatories also reconfirmed their commitment to promoting technical training and other social initiatives in Libya, BP said on Monday.
Furthermore, the companies intend to finalise and complete afinalizements by the end of this year, with a target of resuming exploration activities in 2019.