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U.S. Will Lift Ban on Sale of Oil Equipment to Soviets

January 16, 1987|MICHAEL T. YAMAMOTO | Times Staff Writer

WASHINGTON — The Reagan Administration, ending a policy imposed nearly a decade ago to protest human rights violations, will lift an embargo on the sale of oil and gas equipment to the Soviet Union, the Commerce Department announced Thursday.

"I am convinced, despite our dissatisfaction with Soviet human rights efforts, that it is no longer in our national interest to keep these unilateral foreign policy controls on exports of oil and gas equipment and technology to the Soviet Union," Commerce Secretary Malcolm Baldrige said in a statement.

The embargo has lost its impact in recent years, Baldrige said, citing widespread availability of similar technology from other countries. Moreover, he said, the restrictions have had a significant and debilitating effect on the U.S. oil and gas equipment industry, which one spokesman estimated has lost $2 billion in business since the restrictions were imposed.

Imposed in 1978

The Jimmy Carter Administration imposed the oil and gas equipment ban in 1978 to protest human rights violations in the Soviet Union, including the jailing of dissident Anatoly B. Shcharansky, who received permission to emigrate to Israel only last year.

The decision to rescind the ban could resuscitate a depressed industry that "really needs the help," said Alexander B. Trowbridge, president of the National Assn. of Manufacturers. He estimated that 46,000 jobs could be gained as a result of the action.

But an official from a California company that produces oil-drilling equipment cautioned that such optimism may be premature. "Certainly, opening a new market of some long-term potential benefit would be welcome but I would not expect much short-term benefit," said Richard Kertson, vice president of Varco International Inc., based in Orange.

Although his company made "substantial selling efforts" in the Soviet Union before the ban was imposed, Kertson noted that the Soviets could simply continue buying their equipment from the nations that they have been doing business with in the last nine years.

One of Largest Buyers

The Soviet Union is one of the largest purchasers of drilling equipment in the world and is conducting major oil and gas exploration projects in many areas, including a new operation in the Arctic Ocean.

Baldrige stressed that the Administration will continue to press for improvement in human rights in the Soviet Union, saying that "the action should not be interpreted as a signal of satisfaction. . . . 1986 was one of the worst years ever, in terms of the number of Jews and members of other groups who received permission to emigrate."

"The resolution of a few spectacular cases does not change such realities as these," a department statement said.

Baldrige noted that the ban affected only non-strategic equipment, such as drilling rigs, bits and mud-removal materials. The decision does not affect an embargo on the sale of military and other sensitive high-technology equipment to Soviet bloc nations.

In addition, the secretary said, restrictions on exports to other nations, among them Libya, North Korea, Vietnam, Cambodia and Cuba, will remain in effect for at least one more year.

Several new restrictions were imposed Thursday, including bans on chemical and helicopter sales to Syria and certain exports to South Africa, that are aimed at fighting terrorism and improving human rights. All such bans are reviewed each year.

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