Eni will acquire the 42.5% stake and become the operator of the exploration and production sharing agreement (EPSA) in Libya, in which the Libyan Investment Authority holds the remaining 15%.
The companies, along with state-owned National Oil Corp. (NOC), signed a letter of intent in London on Oct. 8 paving the way for the final deal. They did not disclose financial terms of the transaction.
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," he said.
BP CEO Bob Dudley hailed the deal 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 a civil war that started in 2011, Eni CEO Claudio Descalzi said.
Libya is producing around 1.25 million barrels per day (bbl/d) of oil, still below its pre-civil war capacity of 1.6 million bbl/d.
BP does not produce any oil or gas in Libya. It signed the EPSA agreement in 2007 to explore onshore in the Ghadames Basin and offshore in the Sirte Basin.
Its exploration program was interrupted in 2011 when the civil war broke out and remains under force majeure. In 2015, the company wrote off $432 million from its Libyan activities.
Eni, which has been operating in Libya since 1959, is currently active in six contract areas in Libya and its production in 2017 reached a record 384,000 barrels of oil equivalent per day.
The EPSA includes two onshore areas in the Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000 sq km (20,850 sq miles).
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