The Geneva conference on oil investments in Libya - Libyan-U.S. oil ties shackled by politics.
Analysis
By Kate Dourian
GENEVA, April 22 (Reuters) - Senior U.S. oil executives broke bread with Libya's top policy makers over dinner in Geneva this week on the eve of an energy conference but there was little else for the Americans to chew on.
Shackled by their government's sanctions against Libya, the Americans could only watch as Europeans, South Koreans and Canadians dealt out calling cards and negotiated hard deals.
The timing of the conference, soon after the suspension of U.N. sanctions against Libya, attracted hundreds of oil and gas executives. Organisers said registrations swelled from just under 200 to more than 400 after April 5, when the United Nations suspended the 1992 sanctions after Tripoli handed over two suspects for trial over the 1988 Pan Am airline bombing.
Relegated to mere spectators, the U.S. delegates could do no more than express polite interest as they wait out the U.S. sanctions, likely to remain in place into the next millennium.
It became obvious during the two-day conference that the departure of U.S. oil firms from Libya in 1986 on the orders of then President Ronald Reagan did not halt its oil expansion.
''In spite of the U.S. and Security Council sanctions Libya, with the assistance of its friends in the region, was able to overcome most of the difficulties that were encountered,'' Energy Minister Abdullah al-Badri told the opening session.
''Now that the U.N. sanctions have been ended, we hope that the U.S.-imposed sanctions will end at once, so that the American companies are able to resume their operations in Libya.''
The atmosphere in Geneva's neutral surroundings contrasted with the harsh words that have characterised diplomatic language between Tripoli and Washington since the early 1980s, when Reagan accused Libyan leader Muammar Gaddafi of sponsoring terrorism and later ordered attacks against Libya in reprisal.
When Badri sat down at the top table during a dinner hosted by France's Elf, a senior executive for a U.S. independent was there as was a top official from Italy's Agip, the biggest operator in Libya. But the language spoken was English.
During coffee breaks, delegates from U.S. oil firms could be seen positioning themselves within view of Libyan oil officials, most of whom were educated and trained in the United States.
Representatives of U.S. oil firms Amerada Hess, USX Marathon, Conoco, Occidental and Chevron all came but none would say if they had bilateral meetings with the Libyans.
''Libya is coming home and I hope that many U.S. oil companies will be part of this homecoming,'' said J. Brooks Buxton, director of Conoco Middle East.
Speaking to the majority audience of Europeans, who displaced the original U.S. pioneers in Libya, he recalled that the North African country was an ''American oil company and an American oil service industry province'' for several years after the first oil was discovered in 1959.
That all changed when Reagan ordered U.S. companies to cease operations and quit the country in 1986. Libyan state oil firms took over the U.S. fields and new territory was ceded to French, Italian, British, German, Spanish and Austrian firms.
In 1996, Washington passed the Iran-Libya Sanctions Act (ILSA), which threatens to penalise any foreign oil company investing more than $20 million a year in the energy sectors of Iran or Libya. It has not been applied against Libya yet.
Badri said that in his view ILSA was ''dead and buried,'' a reference to waivers granted to recent oil deals with Iran.
The U.S. administration has said that there would be no immediate end to unilateral sanctions but none of this appeared to worry the Libyans much as they depicted their country's potential oil riches to prospective investors, including bankers, aviation experts and construction firms.
In politics too, Gaddafi was taking centre stage. In the last two weeks, he negotiated a ceasefire in Congo and mediated in the Sudan-Eritrea conflict while playing host to a stream of foreign visitors, including Italy's foreign minister and Jordan's King Abdullah.
Libya, seen as a secure and cheap source of oil and gas for the European market to the north, attended a Euro-Mediterranean meeting in Germany last week as part of its rehabilitation.
A senior non-Libyan delegate said the Americans could not afford to stay away from the Geneva conference and risk losing out to the Europeans who now produce roughly one third of Libyan oil.
''Because of sanctions, the Americans are excluded from Iran, Iraq and Libya, three low-cost sources of oil,'' he said.
Libya is planning to revise its 40-year-old petroleum law and issue an international oil licensing round in early 2000 but officials said U.S. oil acreage would be protected under an agreement which expired in 1989 but which Libya still honours.
''Libya's position as a pivotal North African oil and gas producer with direct access to markets in Europe and the Mediterranean basin will continue well into the millennium and hopefully, the U.S. oil companies will be back operating in Libya by then,'' Buxton said.
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