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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (78389)	3/23/2000 7:57:00 AM
From: Les H	Respond to of 132070

Washington Prepares to Relax Position toward Tripoli 0238 GMT, 000323 The suspension of U.N. sanctions against Libya has once again made that country, a net oil exporter, attractive to foreign investors. Now the United States is opening the door for warmer Tripoli-Washington relations that might eventually lead to a reconsideration of U.S. sanctions against Libya. With more than 70 percent of its oil and gas reserves untapped, Tripoli presents Washington with a more viable and profitable alternative than the other two oil-producing nations currently under U.S. sanctions ? Iran and Iraq. On March 21 the U.S. State Department announced it would send a delegation of officials to Libya to evaluate the possibility of lifting U.S. restrictions on travel, setting the stage for possible easing of sanctions in the near-term. Washington?s current sanctions on Iran, Iraq and Libya cut the United States off from more than 20 percent of the world?s oil reserves. The potential for development and expansion of Libya?s oil sector is high. Hindered by outdated infrastructure, the country produces 1.4 million barrels per day (bpd). Although close to its full capacity of two million bpd, this is only a fraction of the approximately 29.5 billion barrels that the U.S. Energy Information Administration estimates Libya holds. U.S. oil companies already have experience and interests in the country. Prior to the imposition of sanctions in 1986, seven U.S. oil firms operated in Libya. Libyan oil minister Abdullah al-Badri has said that U.S. oil companies could return to the fields they once operated. After the U.N. suspended sanctions last year, two of the firms applied to the U.S. Treasury Department for permission to travel to Libya and reclaim the abandoned assets. Washington may be turning to Tripoli in an effort to increase overall oil production output to counter OPEC?s adherence to production quotas, a strategy that has pushed oil prices to more than $30 dollars per barrel. Increasing production output from Libya ? one of the three countries currently off limits to the United States ? would be more politically feasible than either Iran or Iraq. Iran?s proven oil reserves stand at about 90 billion barrels. Yet the United States cannot tap into this supply. Relations between Washington and Tehran remain strained, despite the recent easing of trade sanctions on luxury items. Iraq is still under U.N. sanctions, which restricts the exploration and development of its 112 billion barrels of proven oil reserves. While the United States is unable to do business in Iran or Iraq, other countries are less constrained. European and Asian oil firms recently began to invest heavily in Iran?s oil sector. Russian and Chinese oil companies have already made tentative deals to develop and refurbish Iraq?s oil sector. Kept out of Iran and Iraq, U.S. oil companies will turn to Libya. Libya?s extradition of the Lockerbie bombing suspects and the suspension of U.N. sanctions has left Washington with less reason to continue its restrictive measures. The United States now has both the opportunity and the motivation to suspend them. The lifting of travel restrictions is just the first step. >>>potential for a nasty surprise next week by OPEC. >>>low, gradual increase in output