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A YORKSHIRE firm is bidding to become one of the first private companies in the UK to play a major role in developing Libya's vast oil fields.
Gary International, which is the principal client company of Beverley-based The Pacific 1899, has signed an agreement with Northern Petroleum to explore for oil in the former pariah state.
They are looking for investment partners to help them win licences to drill for oil in fields which are expected to contain reserves worth billions of pounds.
The Pacific is the UK service company for Gary International, which has traded in Libya for 28 years, while London-based Northern Petroleum already has oil and gas interests in the UK, Spain and Italy.
John Hart, the Pacific's head of finance, said the agreement followed two years of informal talks with Northern Petroleum, which is listed on the Alternative Investment Market (AIM).
Libya has started to rejoin the international business community following its decision to renounce terrorism.
"For many years we have been seeking a UK oil exploration company to help in our ambitions to explore and eventually produce oil in Libya,'' said Mr Hart.
"The embargo against Libya has recently been lifted and Libya is wishing to develop ever stronger ties with Europe and the UK. We have found a very favourable response to our overtures regarding oil exploration investment in Libya." Mr Hart said Gary and Northern Petroleum were 50/50 partners in the joint venture, which planned to enter the next bidding round for stakes in oil fields.
On average, five test wells have to be drilled before engineers strike oil. Altogether, Mr Hart believes the joint venture needs guarantees of £200m. Gary International is hoping to raise £16m and is seeking backers to make up the shortfall.
"There is fantastic potential in Libya," he added. "Northern Petroleum are offering to give us all the back-up we need with their expertise in the business."
Mr Hart said there were tremendous opportunities for businesses wanting to seal contracts in Libya.
Earlier this year, Gary International signed a £13.8m deal to build a sewage plant on the outskirts of the capital, Tripoli.
The Pacific recently contracted a controlling stake in Gary, which has traded in Libya since 1976.
Initially, Gary acted as agents for phosyn fertilisers. It later diversified from agriculture into industry, securing contracts to build sewage and water treatment works, roads and factories. One of Gary's sister companies, Halcyon Hydrocarbons, has been invited to negotiate for oil leases by Libya's National Oil Corporation.
Prime Minister Tony Blair's meeting with Libyan leader Muammar Gaddafi in March marked the latest step in Libya's rehabilitation
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