Shutting Down the Rigs

More than four months after it first moved to sever all U.S. commercial relations with Libya the Reagan Administration has finally notified five American oil companies still doing business there that they too must pull out, by no later than June 30. The main intent of this action is to lift the charge of hypocrisy that has been raised by those Western European countries that have come under U.S. pressure to curtail or end their own economic involvement with Libya. Why, the Europeans wanted to know, should we do what the United States itself has failed to do? The question was a fair one.

The five oil companies--Conoco, Marathon, Amerada Hess, W.R. Grace Co. and Occidental Petroleum--were granted an exemption from the Feb. 1 deadline that was imposed as part of a U.S. policy to punish Libya economically for its support of international terrorism. The companies had argued that an abrupt pullout would have forced them to abandon up to $1 billion in assets, giving Col. Moammar Kadafi’s regime an economic windfall. The companies asked for more time to sell off their Libyan equipment and holdings, but as things turned out there was something less than a stampede of buyers eager to snap up the American investments. What that apparently means is that those assets will now fall into Libya’s hands after all, either by expropriation or at distress-sale prices.

None of this is likely to have much of an effect on the earnings of the oil companies, on Libya’s ability to produce and export oil or--most to the point--on the willingness of U.S. allies to join in economic sanctions against Kadafi. As West Germany, Italy, France and other European countries have made clear, they are not interested in sacrificing their relations with Libya to support what they see as an overreactive U.S. policy. What then is gained? In practical terms, probably nothing. But at least the United States will no longer suffer the embarrassment of seeming to urge one standard on others while pursuing another for itself.