Oil Firms Look to Cut Libya Losses : U.S. May Allow Transfer of Assets to Foreign Subsidiaries
The Reagan Administration is considering granting five American oil companies permission to cut their losses by transferring their Libyan assets to foreign subsidiaries--a move, an oil expert said, that would gut U.S. economic sanctions against Libya.
The permission, if granted, would allow the oil concerns, which pump 240,000 barrels of oil a day, to continue the flow of Libyan oil to the West. A barrel is the equivalent of 42 gallons of oil.
U.S. sanctions, which bar all U.S. individuals and companies from commercial dealings with Libya, were to take effect this morning.
In ordering the sanctions earlier this month, President Reagan blamed Libyan leader Moammar Kadafi for aiding the group responsible for terrorist massacres at airports in Rome and Vienna.
Henry M. Schuler, an oil expert at the Georgetown Center for Strategic and International Studies and a fierce critic of the Kadafi government, said the oil companies “are making a strong pitch to be allowed to turn their assets over to foreign subsidiaries. If that happens, it will gut the sanctions.”
Questions Remain
A Treasury Department official, speaking on condition that he not be identified, acknowledged Thursday that “some questions dealing with subsidiaries still need to be resolved.”
Similar statements were made by Marathon, Conoco and Occidental, three of the companies pumping oil in Libya. The others are Amerada Hess and W. R. Grace. Conoco’s statement, issued through a spokesman in Washington, said: “We’ve been meeting (with government officials) on these questions and making our pleas.
“Conoco has been complying with both the letter and the spirit of the president’s executive order,” the company said. “There are no back-door or behind-the-scene deals.”
At Occidental Petroleum, spokesman Frank Ashley said: “We will do whatever the government permits us to do. We hope that will be reasonable and not sacrifice our property and the property of our allies. But whatever the laws are, we will comply with them.”
