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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Tomas who wrote (2601)	6/28/2001 10:37:45 PM
From: Tomas	Read Replies (2) of 2742

Petro-Canada's sanctions sidestep in Libya Upstream, June 29 Dann Rogers Petro-Canada is expanding its international operations with the purchase of Lundin Oil's Libyan assets and remains confident it still won't incur the wrath of the US government, which has unilateral sanctions against the African country. As part of a three-way deal carving up Lundin's diverse international holdings, Calgary's Petro-Canada is paying C$112 million ($73 million) for the Swedish firm's 25% stake in the En Naga block in the Sirte basin in Libya. Libya's National Oil Company holds the other 75%. The US Congress is seemingly poised to extend by five years its Iran-Libya Sanctions Act authorising it to impose penalties on foreign firms with investments of more than $20 million in either country. Measures under the act include denying the firm US bank loans or forbidding imports from the foreign firm to the US. However, since former president Bill Clinton signed the act in 1996, the US has not imposed any sanctions. Petro-Canada spokesman Chris Dawson said the company has met with US State Department officials to discuss the acquisition and is confident it will not spark an investigation. "We looked into the sanctions and we don't foresee any actions by the US government," said Dawson. "The En Naga field already has proven production and reserves so it's not a new project and is a relatively small development. The legislation stipulates that investment must significantly contribute to the enhancement of Libya's hydrocarbon development and we don't think this is the case." Petro-Canada isn't releasing production estimates from the field, but in previous press releases Lundin estimated its reserves at 100 million barrels. Petro-Canada has virtually no international operations aside from an interest in the Tamadenet field in Algeria that is producing about 3700 barrels daily net to the company. Talks with Algerian officials over developing a major natural gas field in the Tinhert area broke off at the end of March, yet the company insists it is still interested in building up a presence in North Africa. "We have always maintained that we would evaluate international opportunities as they arose," said Dawson. "Nothing formal is being discussed at the moment, but we are still talking with officials from Algeria and Tunisia."

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