BP signs major deal in Libya

BP PLC
29 May 2007


press release

May 29, 2007


                BP AGREES MAJOR EXPLORATION AND PRODUCTION DEAL
                                   WITH LIBYA

  'BP's single biggest exploration commitment,' says BP group chief executive.


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 $900million,
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.

BP and the LIC will explore around 54,000 square kilometres (km2) of the onshore
Ghadames and offshore frontier Sirt basins, equivalent to more than ten of BP's
operated deepwater blocks in Angola. Successful exploration could lead to the
drilling of around 20 appraisal wells.

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.


Note to editors

• For comparison, the acreage awarded in the North Ghadames block alone is the 
  size of Kuwait. The acreage in the offshore Sirt basin is the size of Belgium 
  or nearly three North Sea quadrants. In total the acreage is more than ten 
  times the size of BP-operated Block 31 in Angola where BP has announced 14
  discoveries so far, or more than 2000 Gulf of Mexico deepwater blocks.

• This agreement follows a Memorandum of Understanding signed between BP and 
  the NOC in October 2005. BP submitted its formal proposal to the NOC in
  April 2006. Negotiations commenced in July 2006.

• This agreement represents a significant step forward in meeting the NOC's 
  objectives as set out in its 'Exploration Master Plan' for 2005-2015. The 
  Master Plan seeks to increase reserves to 20 billion barrels of oil equivalent
  by increasing exploration in offshore and 'frontier' areas and through the
  application of modern exploration technologies, and to increase production to
  3.5 million barrels per day (mmbpd) by 2020 (the equivalent production rate of
  the 1970s). To achieve this, the NOC is targeting a minimum of 50 wildcat 
  wells drilled per year and the shooting of a minimum of 4000 km2 of 3D seismic 
  and 10,000 km of 2D seismic per year. These targets will be met through 
  existing NOC and Joint Venture operations and through investment by 
  international oil companies expected to total some $7 billion.

• Sirt and Ghadames are two of Libya's five major basins. Sirt onshore has been 
  the most productive to date, having produced over 20 billion barrels of
  oil equivalent.

• Offshore deepwater Sirt is believed to be 'on trend' geologically with onshore 
  Sirt and is thought to be a buried rift with multiple play opportunities like 
  those found in the North Sea where BP has considerable experience.

• Ghadames basin is thought to be part of, and similar geologically, to the 
  prolific Illizi and Berkine basins. Previous drilling in the 1970s and 1980s 
  was based on early vintage 2D seismic data. BP plans to acquire extensive 3D
  seismic data using proprietary and the latest technologies. The offshore,
  deepwater Sirt acreage in water depths beyond 2000m, up to 300 km offshore is
  presently unexplored. It is considered a frontier deepwater basin, and a
  potential extension of the onshore Sirt basin.

• The Libyan Investment Corporation is a corporate entity headquartered in 
  Tripoli, Libya. It was established by Decree 208 (dated August 28th 2006) of
  the Libyan General Peoples' Committee (the Libyan Cabinet). The LIC is an
  'umbrella' organisation that oversees and manages a series of government
  investment funds, which invest in opportunities in Libya and internationally -
  most notably in Africa and the Arab world - in areas such as agriculture, real
  estate, infrastructure, oil and gas and in shares and bonds.

• BP is one of the world's largest oil and gas companies, producing almost 4 
  million barrels of oil and gas and serving millions of customers every day. It 
  operates in more than 100 countries across six continents. BP's business
  segments are Exploration and Production; Refining and Marketing; and Gas, 
  Power and Renewables which includes its Alternative Energy business. Through 
  these business segments, BP provides fuel for transportation, energy for heat 
  and light, retail services, and petrochemicals products.

• The education and training programmes being considered include upgrading NOC's 
  two primary Petroleum Training Centres; enhancing the skills of Libyan 
  technicians and operators; developing a learning and competency development 
  programme for Libyans in technical and professional roles, including in senior 
  management positions; enhancing English language skills; and developing 
  training programmes for Libyan suppliers and service companies to enhance 
  their ability to compete for contracts with international oil companies.
  Opportunities to enhance Libya's formal education system will be explored,
  including academic exchanges between Libyan institutions and international
  centres of excellence.

                                    - ENDS -


Further information:

BP Press Office           [phone]        out of hours 0207 496 5129.
Robert Wine:              + 44 (0)207 496 4827;      m (0)7776 166439
David Nicholas:           [phone];       m (0)7831 095541
Sheila Williams:                                     m (0)7788 190449




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