March 23, 2011 / 2:49 PM / in 7 years

EU agrees to sanctions against Libyan oil companies

BRUSSELS (Reuters) - European Union governments agreed on Wednesday to impose sanctions on Libya’s National Oil Company, in line with last week’s United Nations resolution, and to add five of its subsidiaries to an EU embargo.

The move follows a decision by the U.N. Security Council to authorize a no-fly zone over Libya and expand the sanctions against Muammar Gaddafi and his close allies that were first imposed in February.

In addition to the U.N. measures, the European Union has also imposed a series of further sanctions, such as asset freezes, over the past month against Gaddafi and firms associated with him or his inner circle.

The list so far has included more than 30 people, as well as entities such as Libya’s central bank and the $70 billion Libyan Investment Authority. Germany has pushed for the inclusion of energy firms, but Italy has until now opposed this.

“The assets freeze is extended to the new entities on the U.N. list...including the National Oil Corporation (NOC) and also to five subsidiaries of the NOC designated autonomously by the EU,” EU member governments said in a statement.

The names of the subsidiaries will be made public on Thursday in the Official Journal of the European Union.

However, the impact of an oil embargo against Libya is likely to be limited because the country’s oil industry has been brought to a standstill by heavy fighting between rebels and Gaddafi’s government.

Libya, the world’s 17th-largest oil producer, had been producing 1.6 million barrels per day before the conflict began.

Some 85 percent of its production was exported to Europe, including about a third that went to Italy. The NOC accounted for half of the country’s output.

Reporting by Justyna Pawlak; Editing by Rex Merrifield and Sophie Hares

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