LONDON, March 6 (Reuters) - Oil and gas major BP said it had mothballed plans to explore in Libya's Ghadames basin because of security concerns, the latest in a series of companies to rethink their projects amid growing instability.
Three years of turmoil since the Arab Spring and tough contract terms have prompted oil firms to reassess their role in Libya, and several have said they would postpone their plans or scrap them altogether.
BP's exploration and production sharing agreement with Libya covers onshore acreage in Ghadames, near the border between Libya, Algeria and Tunisia, and offshore acreage in the central Sirte basin.
"With respect to the onshore exploration drilling programme, a security review in June concluded that this could not be safely and securely delivered by BP at this time. Alternative approaches are being considered," BP said on Thursday in its annual report.
The British company was continuing with its offshore plans, where safety risks are much lower.
"Preparation work towards our offshore exploration drilling programme is continuing," it said.
BP signed the agreement with Libya in 2007, when it was seen as a landmark deal that sealed former dictator Muammar Gaddafi's return to the international fold after years of sanctions.
BP is still at the exploration stage and does not produce oil in Libya. Its assets there were worth $472 million at the end of 2013, according to its annual report.
Since Gaddafi's overthrow in 2011, instability in Libya has been rising, with attacks on foreigners becoming increasingly frequent. A mix of disgruntled workers, separatists and militias have blocked much of its oil exports for months at a time.
In September, Exxon Mobil, the world's largest publicly traded energy firm, said it would cut its staff and operations in Libya due to growing insecurity.
Royal Dutch Shell abandoned exploration on two blocks in 2012 due to disappointing results.
Last year Marathon Oil attempted to sell its stake in one of Libya's top oil ventures, but Libya blocked the deal.
BP was one of several oil companies that scrambled to return to Libya after 2003. In bidding rounds opening up territory that had been off limits for years, companies accepted some of the industry's tightest exploration and production terms.