A fire has broken out at one of Petro-Canada's (TSX:PCA) major Libyan storage depots, which contains about 450,000 barrels of crude oil, the Calgary oil giant said Wednesday.

The company is carefully monitoring the fire, which has been contained to one tank, said London-based spokesman Tom Carney.

Petro-Canada is currently using alternative storage capacity to handle the oil it produces in Libya, Carney said.

The impact on the company's operations has been minimal so far and nobody has been hurt in the fire, which started late Tuesday morning, he added.

A lot of the oil has been drained off, but it is too early to tell how the fire will affect oil supplies.

Petro-Canada produces about 90,000 barrels of oil a day in Libya, one of the Canadian company's key overseas operating areas.

It gained a significant position in the North African country in 2002, through its $3.2 billion purchase of German-based Veba Oil and Gas, which had a number of concessions in the region.

That acquisition made Petro-Canada one of Libya's top producers.

In June, Petro-Canada signed six 30-year exploration and production sharing agreements in the North African country.

The deal with Libyan National Oil Corp. contemplates total spending of US$7 billion, with 50 per cent of all development costs to be paid by Petro-Canada, which will receive an initial 12 per cent share of production.

The Libyan oilfields are believed to hold resources of almost two billion barrels of oil, with a redevelopment program expected to double current production levels to about 200,000 barrels of oil per day over the next five to seven years.

As part of the deal, Petro-Canada will pay a "signature bonus" of US$1 billion in three stages, including US$100 million for social investments in Libya. The company also proposes to invest US$460 million over the next seven years for an exploration program in Libya's prolific Sirte region.

In midday trading Wednesday on the TSX, Petro-Canada shares rose 54 cents to $45.71.

World oil prices fell below US$113 on commodities markets midday Wednesday after rising about US$116 earlier in the session.

[Canadian Press]