By KHALED AL-DEEB
The Associated Press
Tuesday, May 29, 2007; 10:07 PM
SIRTE, Libya -- British Prime Minister Tony Blair welcomed improved relations between Britain and Libya as oil companies from both countries signed a major deal on Tuesday.
BP PLC's exploration and production deal with Libya's National Oil Company, worth at least $900 million, brings the company back to Libya for the first time in more than 30 years and represents another clear sign that the African nation is emerging from its international isolation after it agreed to scrap its secret nuclear weapons program and compensate victims of terrorist attacks.
The deal was signed in this coastal city, where Blair and Libyan leader Moammar Gadhafi met for talks in an effort to improve long-estranged relations.
Blair said BP's decision to return to Libya for the first time since 1974 _ when the country's oil industry was nationalized _ showed the commercial relationship between Britain and Libya was "simply going now from strength to strength".
"A few years back, Britain and Libya could never have had this relationship," Blair said, speaking in the desert outside a tent where he had a two-hour meeting with Gadhafi.
"This is a change of benefit to Libya and Britain and the wider region," he said.
BP's Chief Executive Tony Hayward said the agreement was the company's biggest exploration commitment. "Our agreement is the start of an enduring, long-term and mutually beneficial partnership with Libya," he said in a statement.
Libya's proven oil reserves are the ninth largest in the world, while vast areas remain unsurveyed for new deposits. Since the country emerged from international isolation, western firms have rushed to sign exploration deals.
Blair, accompanied by his wife Cherie, landed in Tripoli earlier Tuesday on the first stop of his farewell African tour. He later flew to Sirte for talks and dinner with the Libyan leader.
The British leader was expected to raise with Libyan leaders an appeal for the release of five Bulgarian nurses and a Palestinian doctor who have been sentenced to death after being convicted on charges that they deliberately injected hundreds of Libyan children with AIDS virus.
Their lawyers and European governments deny they deliberately infected the children and have demanded their release.
In Sirte, Blair met with families of Libyan children infected with HIV.
"I'd like to express my sorrow for what happened to them and their families and my determination to do everything I can to bring a just solution," he said.
Blair's efforts to bring Gadhafi into the international fold in 2004 were initially met with discomfort in Britain amid memories of the Lockerbie air disaster, when Libyan agents brought down a Pan Am airliner over Scotland in 1988 and killed 270 people.
Libya had since made good on a 2003 promise to scrap its weapons of mass destruction program and plays a "useful role" in pan-African moves on climate change and the conflict in Sudan's Darfur region, said Blair's official spokesman, speaking on condition of anonymity in line with government policy.
Since renouncing his nuclear weapons program, Gadhafi pledged to do away with his chemical weapons stockpile by the end of 2010. British experts are aiding the work and helping Libyan weapons scientists turn their expertise to radiological medicine, the Foreign Office said.
In turn, Tripoli cleared hurdles for Britain to deport suspected Libyan terrorists back to their homeland, signing a 2005 "memorandum of understanding" with Britain in 2005, a legal document promising not to torture the men.
But the policy was dealt a severe blow in April, when an appeal judge rejected the legality of the assurances, upholding claims from two Libyans that they could face violence if deported. Both men were ordered to be freed from custody.
The British government is aware of concerns about human rights in Libya and doubts over the systems of government and justice, but believes it is crucial to continue developing ties, Blair's spokesman said.
Blair hoped to use the African tour _ which will also include visits to Sierra Leone and South Africa to corral support for greater pressure on Sudan over the bloodshed in Darfur where more than 200,000 people have died in four years of conflict.
President Bush announced stiff new U.S. economic sanctions against Sudan Tuesday and also planned to call for a new U.N. resolution.
Associated Press writer David Stringer contributed to this report from London.