UPDATE 2-Libya warns U.S. energy firms over diplomatic row

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Thu Mar 4, 2010 11:40am EST

* U.S. oil executives summoned by Libyan energy chief

* Firms told that U.S. business interests could suffer

* Row started after U.S. criticism of Libyan leader

(Changes dateline from previous ALGIERS, adds details)

By Salah Sarrar

TRIPOLI, March 4 (Reuters) - Libya's top oil official on Thursday summoned the local heads of U.S. energy firms to tell them a diplomatic row with Washington could have a negative impact on U.S. businesses in Libya, the state oil company said.

Libya is demanding that Washington apologise after a U.S. official made caustic comments about Libyan leader Muammar Gaddafi, and the warning to oil firms was the clearest signal yet that Tripoli was prepared to escalate the row.

At stake are billions of dollars invested by U.S. firms which flocked to Libya -- home to Africa's largest proven oil reserves -- after a U.S. trade embargo was lifted in 2004.

Shokri Ghanem, the country's most senior energy official and head of Libya's state National Oil Corporation (NOC), summoned executives from Exxon Mobil (XOM.N), ConocoPhilips COP.M, Occidental <OXY.N, Hess (HES.N) and Marathon (MRO.N).

"He informed these companies of the resentment at the irresponsible statements made by a State Department spokesman to the media," NOC said in a statement.

The U.S. official who made the remarks about Gaddafi "does not know that such statements will have a negative impact on U.S. companies operating in Libya," it said.

The statement said the executives at the meeting expressed regret over the U.S. spokesman's remarks and said they would inform Washington "that such remarks would hurt oil interests for U.S. companies".

Tripoli's anger was provoked by a comment from State Department spokesman P.J. Crowley. He was talking to reporters about a speech by Gaddafi in which the Libyan leader called for a "jihad," or armed struggle against Switzerland.

The spokesman said the speech reminded him of an address Gaddafi made last year, which he said had involved "lots of words and lots of papers flying all over the place, not necessarily a lot of sense."

After Tripoli had complained about his remarks, Crowley said he had not meant them as a personal attack, but he stopped short of offering the apology demanded by Libya.

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U.S. aircraft bombed Tripoli in 1986 after Washington blamed Libya for a bomb attack on a West Berlin discotheque, one of several low points in relations between Libya and the United States since Gaddafi came to power in 1969.

When Libya renounced banned weapons programmes, Washington restored diplomatic ties and dropped a trade embargo.

Since then business ties have been growing fast. In 2003, the United States exported $200,000 worth of goods to Libya and imported nothing. By 2009, exports to Libya had surged to $666 million and imports to $1.9 billion.

But bullishness among Western investors has been tempered by a fierce diplomatic row that began as a quarrel with Switzerland but has since expanded to set Tripoli at odds with several European countries and now the United States.

The problem started in July 2008 when police in Geneva arrested Gaddafi's son Hannibal at a luxury lakeside hotel on charges -- which were later dropped -- of mistreating two domestic employees.

The row took on a Europe-wide dimension last month when Libya stopped issuing visas to citizens of the Schengen zone, a passport-free travel zone that includes Switzerland and most European Union countries.

Libya on Wednesday also imposed a trade embargo on Switzerland. That step was unlikely to have much practical impact as the two countries' trade ties are minimal, but it signalled Tripoli had no intention of backing down.

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Comments (3)
zenrahim wrote:
If oil is their Strength than we have to Neutralize them, Lately Syria and now this Libya are extremly showings the signs of Hitler (my way or highway) and using the wealth to support terrisism, No wonder Mr. President Bush was right this states are exis of Evil

Mar 04, 2010 2:01pm EST  --  Report as abuse
US should not bow to the wishes of Ghadaffi. If they do this time he will up his antee the next time.

Mar 04, 2010 2:33pm EST  --  Report as abuse
freespeech0 wrote:
non-muslims need to remember what it was like under fascious nazis germany,,,

cuz fascious nazi terrorislam will be worse,,,

the UN should charge muslims with inciting hatred and discrimination against non-muslims,,, and crimes against humanity,,,

ummmm when will islam ban slavery??? when will islam pay reparations for 1400 years of slavery and stealling non-muslim land???

non-muslims need to demand reparations through the UN from the muslim slavers,,,

Mar 04, 2010 3:37pm EST  --  Report as abuse
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