ESSEN, Germany, Dec. 30 (UPI) -- German energy company RWE said it was gearing up to form a joint venture with a Libyan company to explore for hydrocarbons off the Libyan coast.
The Middle East branch of RWE signed an exploration and production-sharing agreement with the Libyan National Oil Corp. for two blocks in the Gulf of Sidra.
Once the agreement is ratified in Tripoli for eight discoveries in the area, RWE will move to form a joint venture with the Libyan state-owned company to conduct operations in Libya, the company said in a statement.
The German energy company said it aims to spend $50 million on exploration and $1.3 billion on field development in the gulf.
Libya had licensing rounds for its underexplored oil fields in 2005 and 2007.
Ross Cassidy, a Libya analyst for the consulting group Wood Mackenzie, told London's Financial Times during the summer that the oil outlook for Libya may be exaggerated.
"Results have been poor when you compare with what was expected and hoped for," he said.
The U.S. Energy Information Agency, however, reports that Libya holds around 44 billion barrels of oil reserves. Gas reserves are estimated at around 54 trillion cubic feet.