Battle for Libyan oil

by Brian Denny

Tensions between imperialist rivals Germany and the United States have 
heightened over the control of oil fields in Libya.

A German company is seeking permission from Tripoli to drill in oil fields 
that formerly belonged to US oil corporations Conoco, Marathon Oil and 
Amerada Hess, whose operations were frozen by US sanctions.

The properties have not been operated by US firms since 1986, when 
Washington banned US companies from doing business in Libya.

The approach by German firm Winterhall is a major escalation in a fight 
between US and Europe over sanctions. Key US Senators have already warned 
Germany that relations with Washington could suffer if a German firm 
reaches a deal to buy US-owned oil deposits in Libya.

Far-right Senate Foreign Relations Committee chairman Jesse Helms told 
German Foreign Minister Joschka Fischer that such a purchase could harm US-
German relations by triggering sanctions under the Iran-Libya Sanctions Act 
(ILSA).

The Sanctions Act was enacted in 1996 to discourage foreign energy firms 
from making investments in Iran and Libya. It gives the US President the 
authority to limit the ability of countries which violate the law to export 
goods to the US.

Mr Helms made it clear to Mr Fischer that a deal between Wintershall and 
Libya could lead to sanctions. However, German government sources in 
Washington have responded by pointing out that the European Union does not 
recognise ILSA.

ILSA expires on August 5 and some members of Congress are aggressively 
seeking support for new legislation that would extend the law for another 
five years.

However, the administration of President George W Bush, which is close to 
oil corporations, opposes the extension of existing sanctions on Iran and 
Libya and is expected to put forward a proposal for alternative sanctions.

In a sign that US oil companies are getting impatient, Conoco chief 
executive officer Archie Dunham said that Libya's national oil company 
appeared to favour selling the oilfields.

"I think that there are probably segments of the management of the Libyan 
national oil company that are frustrated with the lack of action by the 
United States Government on lifting the unilateral sanctions", he said.

Infuriating Washington further, Germany has also strengthened relations 
with oil-rich Iran in a move to secure energy resources in the future. This 
fact has not been lost on the US oil giants who are still locked out of the 
Iranian energy market by their own government.

Mr Dunham said that Conoco, the forth-largest US oil company, was 
especially keen to play a role in the development of Iran's huge Azadegan 
oil field which has estimated reserves of five to six billion barrels of 
oil.

These inter-imperial rivalries will amuse both the Libyans and the Iranians 
and may even lead to an end of the current US sanctions regime and the 
normalisation of trade relations.

While Mr Bush wants to act tough in the new world order, his corporate 
masters may force him to dance to another tune if it is in their financial 
interests.