By Fawzia Sheikh, www.oilprice.com

After nearly 40 years, BP is returning to Libya amid widespread controversy about an alleged link to the Lockerbie bomber’s release and fears about a potential oil disaster in the Mediterranean Sea.

Yet despite the oil giant’s enthusiasm, its future in Libya – a country boasting the largest crude oil reserves on the continent — may end up as murky as competitors that have ventured there.

Three years ago, BP signed a $900-million exploration and production deal with Libya, decades after Muammar Gaddafi’s government nationalized 100 percent of the oil company’s holdings. BP, which has not been involved in the country since 1971, announced in late July that it would begin drilling in the western part of Libya and in the deep waters off the coast in a matter of weeks.

Although BP presumably believes the agreement will be good for business, Libya’s terms of attracting foreign investment is “so convoluted and corrupt, I don’t think anybody gets a real advantage,” said Ronald Bruce St John, an analyst for Foreign Policy in Focus, a Washington-based think tank.

http://oilprice.com/Geo-Politics/Middle-East/An-Uncertain-Homecoming-BPs-Return-To-Libya-Decades-After-Gaddafis-Revolution.html