Considers Opening Up Some Former Oasis Areas To IOCs
MEES understands that the Bush administration has rejected oil company requests to review sanctions against Libya and will instead allow the 1996 Iran-Libya Sanctions Act (ILSA) to be rolled over in a modified form when it expires next August.
It is further understood that the new legislation will emphasize the two major US concerns: that Libya should accept full responsibility for the Lockerbie bombing and should compensate the families of the victims accordingly.
While negotiations in this regard are taking place between the US, UK and Libyan ambassadors at the UN, it is not expected that these issues will be resolved before the August deadline and the results of the appeal process on the Lockerbie judgment by the Scottish tribunal.
MEES soundings indicate that the modified ILSA legislation will be divided into two parts, one dealing with Libya and the other with Iran.
It is expected that the Iranian sanctions would remain unchanged, although much will depend on the results of the Iranian presidential elections on 8 June.
The proposed renewal of the unilateral sanctions will increase the pressure on US oil companies with concessions in Libya.
MEES learns from authoritative sources that the Libyan National Oil Corporation (NOC) has informed the former Oasis Oil Company of Libya group (Conoco, Marathon and Amerada Hess) that it is reviewing the status of their concessions in the light of the fact that they have ceased operations since June 1986 and has asked the US firms to clarify when they will be able to resume operations in Libya.
Moreover, MEES learns NOC has made it clear to the US companies that it is considering opening up some of the participation areas originally held by the US consortium to international oil companies, ie: relinquishment of particular concession areas such as part of Block NC-98 with rich gas reserves.
NOC and the US firms signed a standstill agreement in June 1986 under which NOC assumed responsibility for operating and maintaining the oilfields held by the former Oasis group until such time as the Oasis companies are able to resume operations in Libya.
NOC now feels that it has spent considerable money and has missed several opportunities to explore and develop parts of the former Oasis group permits.
And while NOC and the US firms have been in continuous negotiations in Europe during the past 15 years with the sole purpose of rolling over the standstill agreements, NOC now wants to take a completely different approach to the matter and to open up unexplored parts of the US companies’ permits to international – mainly European – oil companies.
MEES learns that the US firms are keen to continue these negotiations and hopefully to reach a new arrangement which would be beneficial to both parties’ long-term interests.
It will be recalled that President Ronald Reagan issued an executive order in January 1986 declaring a national emergency and forbidding US firms to operate in Libya (MEES, 13 January 1986).
President Bill Clinton informed Congress last January of his decision to extend the US economic sanctions imposed on Libya 15 years ago for a further six months (MEES, 8 January).
© 2001 Mena Report (www.menareport.com)