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Monday, 3 September, 2001, 14:26 GMT 15:26 UK
Libya gives US oil ultimatum
Tripoli skyline
Libya is keen to boost its oil industry with or without the US
Libya has warned US oil companies that they have one year to return to the oil fields they abandoned 15 years ago or they will lose their operating licences.

The companies were forced to pull out in 1986, when the US imposed unilateral sanctions because of alleged links with terrorism.

"We have agreements with the American companies, and those agreements need our cooperation," said Libya's foreign minister, Abdel Rahman Shalqam.

"Either they will come and work or we will give their rights to other companies. If they don't decide next year, we are going... to have our decision," he said.

Closer ties

In August this year President Bush extended the US sanctions for a further five years, despite the opposition from the energy industry.

The Libyan foreign minister said that Libya was keen to resolve the continuing issue of the unilateral American economic embargo.

"We are keen to have relations with America and Europe, but especially with America," he told reporters on Sunday.

"We'll give them time, but we can't waste our fields which are ... waiting for the Americans," he said.

The remarks come a day after Libyan leader Muammar Gaddafi condemned US foreign policies in a speech marking the 32nd anniversary of the establishment of the Libyan People's Socialist Jamahiriya.

Europeans advance

The American oil company Conoco first struck oil in Libya in 1955.

Since it was forced to withdraw in 1986, the company estimates it has had to forego $5bn (3.4bn) in revenues. Before the exodus, US oil companies were the biggest operators in Libya.

As well as the US action against Libya, the United Nations imposed an international embargo in 1992 over the Lockerbie affair but this was eased two years ago when Libya handed over the two Lockerbie suspects.

But despite objections from Conoco and other oil companies, American sanctions have remained in place.

Since then foreign investors, primarily from Europe, have been piling into Libya.

At least one European company reportedly has sought permission from Libya to drill in fields to which American companies had rights.

Mr Shalqam also said Italy and Libya have recently agreed on a $5bn gas project.

Libya has investments in more than one oil refinery in Italy and Libya is Italy's main oil supplier.

 WATCH/LISTEN
 ON THIS STORY
The BBC's David Bamford
"Colonel Gaddafy is taking an increasingly pragmatic approach"
See also:

09 May 01 | Business
BASF faces Libyan sanction fines
04 Aug 01 | Americas
Libya and Iran hit by new sanctions
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