A German firm is seeking permission from Libya to drill in oil fields that formerly belonged to American companies, whose operations have been frozen by US sanctions since 1986, the Washington Post reported Tuesday, quoting German officials.
The effort by Wintershall AG represents a major escalation in a running dispute between the United States and Europe over economic sanctions, and it heightens the urgency of a battle brewing in Congress over whether to renew the Iran-Libya Sanctions Act (ILSA), which expires in August, said the daily.
The law, enacted in 1996 to punish Libya and Iran for supporting terrorism, imposes stringent penalties on foreign firms that invest in those countries.
Although European companies have defied ILSA in the past, US officials said the proposed Wintershall deal is the first that threatens significant US economic interests.
The oil fields at issue are estimated to hold more than 3 billion barrels of oil as well as newly identified potential for natural gas.
According to the daily, the Bush administration has not yet staked out a position on renewal of ILSA. Some administration officials, sharing the energy industry's view, want to soften or eliminate the law and lift other sanctions to increase US access to Libyan and Iranian oil. Others argue that Libya and Iran must take more steps against terrorism before sanctions are removed.
One senior Bush administration official said last week that the German acquisition of assets long held by the Oasis Group, a consortium of three US oil companies -- Conoco, Amerada Hess and Marathon -- would be "a very serious issue on at least two counts.” – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
