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WASHINGTON, April 23: The United States eased an economic embargo against Libya on Friday, allowing purchases of Libyan oil and resumption of most trade to reward Tripoli for giving up its weapons of mass destruction, the White House announced.
A statement from White House spokesman Scott McClellan said the move allows the resumption of most commercial activities, financial transactions and investments, and that US companies "will be able to buy or invest in Libyan oil and products".
The decision was made because "Libya has taken significant steps eliminating weapons of mass destruction programs and longer range missiles, and has reiterated its pledge to halt all support for terrorism", the statement said.
Export controls on items with military uses will be maintained. Direct air service between the United States and Libya is not yet authorized, nor is the release of frozen Libyan government assets. A dialogue on trade will be opened and the United States will drop its objection to Libyan efforts to join the World Trade Organization, the statement said.
In addition, it said, the State Department will establish a U.S. liaison office in Tripoli pending congressional notification. Libyan students will be eligible to study in the United States, subject to admission and visa requirements, and a U.S. education delegation will travel to Libya on April 23 to begin consultations on cooperation on education.
US investment
Following are some details about sanctions on Libya and frozen US oil assets:
The United States banned imports of Libyan oil and some exports to Libya in 1982. Sanctions were expanded after the 1986 bombing of a Berlin disco to include a total ban on direct import and export trade, commercial contracts, and travel-related activities.
The US Iran-Libya Sanctions Act - passed in 1996 and renewed for another five years in 2001 - granted the US president power to punish non-US firms investing more than $20 million a year in energy sectors in Libya or Iran.
The sanctions were suspended when Libya turned them over in April 1999.
US COMPANIES WITH ASSETS IN LIBYA:
Several US companies still hold assets frozen in Libya since 1986. The Oasis Group - an association of US oil companies comprising Conoco (now ConocoPhillips, Amerada Hess and Marathon Oil - produced 400,000 barrels per day (bpd) in 1986 after its production peak of more than 1 million bpd in 1969.
Those rights expire in 2005 and Libyan officials have said they must return or risk the concessions being handed to other foreign companies. Separately, Occidental Petroleum has assets frozen that produced 170,000 bpd in 1986.
OIL SECTOR: Libyan oil output capacity is now expanding thanks to European investment, with Tripoli hoping to attract up to $30 billion investment to boost capacity to two million bpd by 2010. Current capacity is estimated at 1.7 million bpd after languishing for many years at 1.4 million bpd.
Libya is also lobbying for a larger share of the overall production limits in the Organisation of the Petroleum Exporting Countries. Its OPEC quota now stands at 1.31 million bpd.
The state National Oil Corp plans to open a new exploration bid round this year with a new flexible production sharing agreement to attract fresh investment. -Reuters
