British oil giant BP will announce today it is returning to Libya in a move which British officials say recognises a warming of relations between London and Tripoli.
"Today BP will be announcing they are going back into Libya," a spokesman for Tony Blair said at a briefing ahead of the prime minister's forthcoming trip to the north African country.
"We are now beginning to develop an economic relationship with Libya which is hugely important," the spokesman said. "That's why companies such as BP can begin to go back into the country today."
He declined to give further details of BP's plans.
A BP spokeswoman said: "We have been in talks with the Libyan government for a couple of years and we're hopeful of reaching an agreement."
She also declined to give details of BP's plans. However, the company said in January it was in talks with Libya on exploration and development opportunities that could lead to multi-billion dollar investment in the former pariah state.
Much of foreign oil companies' interests in Libya were nationalised in the 1970s. Others pulled out when the US imposed sanctions in 1986.
Libya has attracted considerable interest from international oil companies since 2004, when the United States and European Union eased sanctions following Libya's agreement not to pursue nuclear, chemical and biological weapons.
Many of the sanctions were imposed on Libya for the 1988 bombing of a Pan Am airliner over Scotland, which killed all 259 people aboard the Boeing 747 jumbo jet and 11 residents of the town of Lockerbie.