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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (982)	4/7/1999 10:26:00 AM
From: Tomas	Read Replies (2) \| Respond to of 2742

Libya invites more oil investment as sanctions ease By Andrew Mitchell LONDON, April 7 (Reuters) - Libya is planning to entice more foreign investment to its oil sector following the suspension of United Nations sanctions, consultants in contact with Tripoli said on Wednesday. Libya, in discussions to award 14 new oil exploration blocks, is considering sweetening investment terms for foreign oil companies, said Geneva's Petroconsultants. European companies, including Italy's ENI , Austria's OMV , Spain's Repsol and Germany's Wintershall (quote from Yahoo! UK & Ireland: BASF.F) already produce around one third of Libya's 1.3 million barrels a day of oil. Momentum for fresh investment gathered on Wednesday as Libyan Oil Minister Abdullah Salem al-Badri expressed the hope that his country might soon see the return of American firms -- still banned by unilateral U.S. measures in place since 1986. U.N. sanctions imposed in 1992, including an air embargo and a ban on equipment for refineries, were suspended on Monday after Libya's delivery for trial of two men suspected of the 1988 bombing of a Pan Am airliner over Lockerbie, Scotland. The diplomatic breakthrough provides an opportunity for European oil firms to forge further ahead in Libyan energy ventures at the expense of excluded U.S. companies. Wintershall and ENI head the pack to deepen European involvement in the country, with Repsol and Britain's Lasmo also well placed, Dmitri Massaras of Petroconsultants said. European firms will have to move fast. Diplomats in Washington said this week that the handover of the Lockerbie suspects could ease the way for the United States to lift its own strict trade and investment ban. Libya made clear on Wednesday that it is keen to resume oil ties with Washington. ''We invite U.S. firms which were our associates in the past to return to the Jamahiriya (Libya) and continue their production,'' Badri told Reuters. ''Our doors are open to talk with them and to facilitate their operations and their return in Libya.'' Libya hopes new foreign capital will help make up for the crippling effect of last year's oil price crash. State-owned National Oil Corporation cut its budget this year by 40 percent to $500 million, Petroconsultants said. Libya's oil investment terms have been largely unchanged since a model contract was set up over 10 years ago. Easier terms could also enhance foreign firms' financial returns at some 21 other blocks designated for future negotiations. The biggest improvements will be seen at ventures which have to build new facilities in remote locations. Details on the new arrangements are expected to emerge at a Geneva conference on Libyan energy later this month. Occidental is one U.S. company expected to benefit when Washington eventually lifts its own sanctions, through its close relationship with current Libyan player Canadian Occidental. U.S. Marathon and Amerada Hess are also likely frontrunners, analysts said. Oil-libya London Seven years of U.N. sanctions proved little more than an inconvenience to existing projects by European companies. Libyan oil production has fallen as a result of commitments to OPEC restrictions rather than the U.N. ban on some equipment. And a drought of new upstream deals in the last few years was partly due to the Iran-Libya Sanctions Act which Washington created in 1996 to try and choke off all energy investment in the two countries. European countries purchase about a million barrels daily of oil from Libya and a big export pipeline project planned by Italy's ENI across the Mediterranean would also make the north African country a growing source of gas for Europe. biz.yahoo.com and biz.yahoo.com