Libya signs deal with Russia's Rosneft

An agreement with Russian oil company Rosneft helps lay a foundation for the recovering oil sector in Libya, Libya's top oil producer said.

Meeting on the sidelines of an international energy conference in London, the head of the National Oil Corp. of Libya met with Rosneft Chairman Igor Sechin to lay the groundwork for investments in the Libyan oil sector.

"This agreement with Russia's largest oil company lays the foundations for us jointly to identify areas of cooperation," NOC Chairman Mustafa Sanalla said in a statement. "Working with NOC, Rosneft and Russia can play an important and constructive role in Libya."

Libya's oil sector is recovering following years of civil war that followed the downfall of the regime of Moammar Gadhafi. In early February, Austrian energy company OMV reported that improved political and security situation in Libya meant it was able to start production at two of the country's larger oil fields.

Libya is exempt from managed production decline agreement from the Organization of Petroleum Exporting Countries aimed to offsetting the supply-side pressures that pushed crude oil prices to historic lows early last year. Russia is contributing to the scheme as a non-member state, though Rosneft has moved recently to gain a stronger position in oil-producing states in the Middle East

Secondary sources told OPEC that Libya produced 675,000 barrels of oil per day in January, a gain of 10 percent from December. Sanalla said Libya set a goal of producing 2.1 million bpd by 2022 with the help of foreign investments.

"We need the assistance and investment of major international oil companies to reach our production goals and stabilize our economy," he said in a statement.

Libya before the outbreak of civil war was producing about 1 million bpd.