The 30 year agreement with an initial six-year exploration phase, was signed on in Tripoli and covers five exploration blocks in the onshore Sirte Basin in northern Libya and one in the onshore Murzuq Basin in western Libya.

The minimum exploration work commitment will involve geological studies, seismic acquisition, and 13 exploration wells over six years.

Included in the work commitment is a three-year feasibility study for the development of a remote field in the Murzuq Basin. This study includes an option to negotiate an agreement for the appraisal and development of this remote field within a further three years.

Woodside is operator of the exploration and production sharing agreement and has a 45% interest, Repsol 35%, and Hellenic Petroleum 20%. The three companies have also agreed to work together on marketing commercial quantities of gas that might be discovered.

The cost of the joint venture's total work program with the Libyan National Oil Corporation is over US$100 million with Woodside's average yearly expenditure over this period expected to be about US$8 million.

"Libya is one of the world's most prolific oil and gas provinces with proven reserves of about 29.5 billion barrels of oil and 46.4 trillion cubic feet of gas," said Woodside's new ventures director, Agu Kantsler.

"This agreement will provide Woodside and its partners with access to 20,000sqkm of highly attractive acreage with excellent oil and gas potential in two basins which, together, have an undiscovered potential of 35 billion barrels.

"Libya has significant remaining and undiscovered potential and we are confident that this agreement will enable us to add value to our portfolio of exploration prospects for drilling from 2005," said Kantsler.