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Wednesday, 9 May, 2001, 16:26 GMT 17:26 UK
BASF faces Libyan sanction fines
Tripoli skyline
Exploration of the coast of Libya has been limited
A German oil company could be the first to face fines in the US for doing business with Libya after reports that it was threatening US economic interests.

Wintershall, the oil and gas business of BASF, said it was "surprised" by reports that the US government views its bid for oil concessions in Libya as an economic threat.

"We are surprised to be receiving so much attention," said Wintershall in a statement.


It is our understanding that the acquisition of these rights will not violate the rights of any third parties' holdings in Libya, including those of US companies

Wintershall statement
US and German newspapers reported on Wednesday that US senators had made strong protests about Wintershall to German Foreign Minister Joschka Fischer during his recent visit to Washington.

Wintershall's bid for the Libyan oil concessions were the first to threaten significant US economic interests, the reports said.

The chief executive of Conoco, the fourth largest US oil company, said on Tuesday that the US government would take a negative view of any action that amounted to confiscation of US assets.

Libyan sanctions

US companies have not been able to operate in Libya since1986 after sanctions were imposed by former President Ronald Reagan.

The US increased the economic blockade with the Iran-Libya Sanctions Act (ILSA) in 1996 which threatened foreign companies with penalties for investing more the $40m in Iran or Libya.

The sanctions, which are due to lapse this August, were imposed after the bombing of a Pan Am 747 over Lockerbie in Scotland for which Libya was blamed.


We feel very strongly that the Libyan national oil company will do nothing to diminish our ownership in that concession

Archie Dunham
Conoco Chief Executive
The UN Security Council lifted its sanctions in 1999 after two Libya suspects were handed over for trial.

European companies, like Italy's ENI which is planning a multi-billion-dollar gas pipeline between Italy and Libya, have defied the sanctions law.

US companies Conoco, Marathon Oil and Amerada Hess were forced to abandon their oil and gas properties.

After the US companies left Libya their assets continued to be recognised by the government.

But the Libyan National Oil Corp in March told the former Oasis Oil of Libya group, which consisted of Conoco, Marathon and Amerada Hess, that it was reviewing the status of their concessions.

Wintershall reaction

"We understand that the entire issue is a matter of political sensitivity," Wintershall said in a statement.

"It is our understanding that the acquisition of these rights will not violate the rights of any third parties' holdings in Libya, including those of US companies," it said.

Wintershall has operated in Libya for decades and bid for the oil concessions offered by the government as matter of course.

"Wintershall is just one of many, much larger, oil and energy companies that may have an interest in acquiring the concessions being auctioned by the government of Libya," the company said.

"Why we are being singled out for the attention makes no sense," it said.

Conoco's view

Conoco Chief Executive Archie Dunham said on Tuesday that some managers at Libya's national oil company favoured selling oilfields but he said he did not expect this to happen.

"We feel very strongly that the Libyan national oil company will do nothing to diminish our ownership in that concession," Mr Dunham said.

Conoco, a leading opponent of US sanctions against Libya, has said it hopes to return to the country when sanctions are lifted.

US vice-president Dick Cheney, who is the former chief executive of the world's largest oil-field service company Halliburton, last year also called for an end to the investment sanctions.

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See also:

31 Jan 01 | Middle East
Libya seeking sanctions prize
01 Feb 01 | Middle East
Libya backed over Lockerbie
29 Dec 00 | Middle East
Push to lift Libya sanctions
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