Italy's ENI agreed to buy half of BP's 85 percent stake in a Libyan oil and gas licence with the aim of resuming exploration next year, the companies said on Monday.
Eni will acquire the 42.5 percent stake from BP and become the operator of the exploration and production sharing agreement (EPSA) in Libya, in which the Libyan Investment Authority holds the remaining 15 percent, they said in a statement.
The two companies, along with state-owned National Oil Corp, signed a letter of intent in London on Monday paving the way for the final deal.
NOC chairman Mustafa Sanalla said the agreement showed renewed confidence in the war-torn country's oil and gas sector.
"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."
BP Chief Executive Officer Bob Dudley hailed it as 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," he said in the statement.
The resumption of exploration would help boost Libya's oil and gas output which fell sharply in the years following the civil war since 2011, Eni CEO Claudio Descalzi said.
By Ahmad Ghaddar and Ron Bousso, Additional reporting by Stephen Jewkes in Milan
AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week