US warns Libya over oil installations

Libya is set to give American concessions to others

By BBC North Africa correspondent David Bamford

The United States has warned Libya that it should take no action to compromise American oil installations in the country which have remained closed for years due to Washington's policy of economic sanctions.

The State Department warning follows the speech at the weekend by the Libyan Foreign Minister, Abdel Rahman Shalqam, in which he said the American oil companies will lose their operating licences if they do not return next year.

A State Department spokesman in Washington said Libya must continue to protect the operating licences of American oil corporations, even though the installations have remained derelict for the last 15 years.

The spokesman said that any move to prejudice the interests of the American companies would make it difficult for Libya to develop the kind of relationship with the US that Libya says it wants.

Normalising relations

Over the weekend, Foreign Minister Abdel Rahman Shalqam said Libya was ready to hand over American concessions to other foreign oil companies if they did not return to Libya by next year.

But he also stated that Libya wanted to restore normal relations with Washington.

In recent months, the Libyan leader, Colonel Gadaffi, has taken an increasingly pragmatic approach in relations with Western countries.

Resentment

European business people who have moved back to Libya say there is much resentment that continuing wrangling over the Lockerbie affair has prevented the US following the United Nations' lead, which eased international sanctions against Libya two years ago.

The American embargo goes back before Lockerbie to 1986, when President Reagan ordered four US oil companies to withdraw from Libya because of its alleged links with terrorism.

Last month, much to the annoyance of Libya, and indeed the American oil companies, President Bush renewed the unilateral embargo for a further five years.