Italy's Eni and Britain's BP on Monday signed a deal with Libya's National Oil Corporation aimed at renewing oil exploration, the companies said.
The three businesses signed a letter of intent in London which will see Eni acquire 42.5 percent of BP's Exploration and Production Sharing contracts in Libya in zones A and B (onshore) and C (offshore).
BP currently holds 85 percent of the EPSAs for each bloc, while 15 percent is controlled by the Libyan Investment Authority.
The onshore blocs are Ghadames North and Ghadames South (southwest of Tripoli) and the offshore bloc is off the coast of Sirte, east of the capital.
Eni will replace BP as the blocs' operator, according to the accord.
Eni is already involved in production and exploration activities in adjacent areas, allowing for synergies, a statement said.
Eni CEO Claudio Descalzi hailed the deal that will help resume EPSA operations 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," said Descalzi.
NOC chairman Mustafa Sanalla saluted the deal's "social development guarantee" as a sign of commitment to local communities in the chaos-wracked North African nation.
"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," Sanalla said.
Libya's economy relies heavily on oil, with production at 1.6 million barrels per day under former dictator Moamer Kadhafi.
Kadhafi's 2011 ouster saw production fall to about 20 percent of that level, before recovering to more than one million barrels per day by the end of 2017.
OPEC has estimated Libya's oil reserves at 48 billion barrels, which makes them the biggest in Africa.