Tighter curbs planned

Press, 2 July 1986, Page 10

Tighter curbs planned

NZPA-Reuter Washington The Reagan Administration is planning to tighten its trade sanctions against Libya now that five American oil companies that did business there have left. After banning almost all trade with Libya because of the alleged complicity of Colonel Muammar Gadaffi’s Government in terrorism, Washington will >now seek to bar imports of refined petroleum products containing Libyan crude oil. Senior officials told a State Department news briefing yesterday that while the American oil companies remained in Libya the United States had had to go slow in efforts to get European co-operation with new sanctions. The Europeans had kept asking “if your companies are operating there why are you asking us” to

co-operate in new sanctions, an official said. But a deadline for the the American oil firms to end operations in Libya expired on July 1, clearing the way for intensified talks with other countries on new measures. These would require exporting countries to certify that a refined petroleum product did not contain Libyan crude before it could be sent to America. Ten countries, mostly in East and West Europe, would be affected. A Treasury official said that Washington would shed no tears if the nuisance of the certification procedure caused European refineries to turn away from Libya for their oil. Colonel Gadaffi was “on the defensive and under great pressure,” although his regime was not now in jeopardy, the officials said.

They said he faced widening cash problems: oil revenue was likely to be SUS 4 billion ($7.4 billion) at the most this year compared with SUSII billion ($20.35 billion) last year. The five oil firms are Conoco, Marathon, Amerada Hess, Occidental, and Grace Petroleum. The first three hold minority stakes in the Li-byan-controlled Oasis Oil Company. When the President, Mr Ronald Reagan, declared an economic boycott of Libya in January the five were allowed to stay on to avoid, giving Colonel Gadaffi an economic windfall of up to SUSI billion by too-hasty abandonment of contracts or concessions. An official said that no such windfall was now expected. The firms are still negotiating the sale of their interests to the Libyans.