U.S. Modifies Libya Sanctions to Protect 5 Firms’ Oil Interests

From Reuters

The United States today modified its trade sanctions against Libya to help five U.S. oil companies protect their investments there.

“The change will allow them to transfer operations to foreign subsidiaries or to operate their assets using third-country nationals,” State Department spokesman Charles E. Redman said at a news briefing.

The five companies affected are Conoco, Marathon, Amerada Hess, Occidental and W. R. Grace.

Under U.S. sanctions imposed on Libya in 1986, these firms were issued special licenses to negotiate “standstill agreements” with the Libyan government under which they would suspend their Libyan operations without being charged with default on their contracts until next June 30.


The result, Redman said, was that drilling continued with Libya collecting its own share and the profits that would otherwise have gone to the U.S. companies.

“The decision . . . will eliminate the significant financial windfall which Libya has been receiving by marketing the U.S. oil companies’ equity share of oil liftings,” Redman said.

“This decision does not represent a change of attitude of the U.S. government toward Libya. Our view remains unaltered. Libya still supports terrorism and subversion.”

U.S.-Libyan tensions have mounted in recent weeks with Washington alleging that Tripoli has built a poison gas factory.

Two U.S. F-14 warplanes shot down two Libyan MIG-23s on Jan. 4. Washington said the Libyan planes were threatening the U.S. jets.