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Energy giant BP plc (BP - Analyst Report) expects to resume deep-sea drilling work off the coast of Libya in 2013. The exploration program worth $2 billion was halted by the company in February 2011 following the rebel uprising that led to the overthrow of Col. Moammar Gadhafi's regime.

In May, BP recommenced its operations in the North African country and is now planning to start the preliminary activities required before drilling work.

The deal – originally signed back in 2007 – included exploration of the frontier Sirte Basin. Management at the British major believes that this geographical area is equivalent in size to more than ten of its deep-water blocks in Angola. As part of the 2007 deal, the company has already amassed 31,000 square kilometers of three-dimensional seismic data, both offshore and onshore.

Management’s renewed drilling program in Libya will see BP drill 25 exploration wells in 2013, which is expected to increase cash flow and returns to shareholders.

BP also invited tenders on Libyan National Oil Company website to conduct underwater geological surveys. The closing date for tender submission was August 14.

London, England-based BP is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products. It operates in three segments: Exploration and Production, Refining and Marketing, and Other Businesses and Corporate.

Recently, BP revealed plans to sell its California oil refinery and 800 statewide gas stations to refining giant Tesoro Corporation (TSO - Analyst Report) for $2.5 billion. This brings its total divestitures to about $26.5 billion since the announcement of the divestiture program in 2010.

BP announced divestitures of several non-core GoM assets, including its stakes in Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover. The company has a fund-raising objective of about $38 billion by the end of next year. Although BP’s asset sale will help in overcoming spill-related costs, its production could be hampered by this ongoing venture.

BP holds a Zacks #3 Rank (short-term Hold rating). Longer term, we maintain our Underperform recommendation on the stock.

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