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Occidental to Resume Oil Operations in Libya

July 30, 2005|From Reuters

Occidental Petroleum Corp. said Friday that it won approval from the Libyan government to resume operations there in territory the company was forced to abandon in the mid-1980s because of U.S. sanctions on the North African country.

The Westwood-based oil company said last week that it had struck a deal to resume operations in Libya but that it was awaiting governmental approval. The company was among the more aggressive of the U.S. oil producers in pursuing access to Libyan oil fields, winning stakes in exploration blocks this year.

President Reagan expanded sanctions against Libya in 1986, barring U.S. companies from doing business there and lifting exemptions for oil companies, in response to the bombing of a disco in Berlin and other terrorist acts that the government claimed were backed by Libya.

Occidental said that resumption of production in Libya, a member of the Organization of the Petroleum Exporting Countries, would add 12,000 to 15,000 barrels of oil to the company's daily output.

In the 19 years since Occidental left the country, its properties have been operated by the state oil company, but the company gained no financial benefit from their operations. The U.S. government eased economic sanctions against Libya in April 2004, opening the door for oil companies to return.

A spokesman for Occidental said it would be the first U.S. oil company to resume production in Libya on fields it controlled before the 1986 sanctions.

Those fields will be in addition to the new blocks that Occidental won in a January auction. Chevron Corp. of San Ramon, Calif., and Amerada Hess Corp. of New York also won exploration licenses in January.

Occidental shares fell 75 cents to $82.28.

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