US, EU extend sanctions to 14 more Libyan oil firms

March 28, 2011
Even as Allied warplanes continue their bombing campaign against Libya's ruling regime, the US and the European Union have announced extended sanctions against 14 separate companies owned by Libya's state-owned National Oil Corp. (NOC).

Eric Watkins
Oil Diplomacy Editor

Even as Allied warplanes continue their bombing campaign against Libya's ruling regime, the US and the European Union have announced extended sanctions against 14 separate companies owned by Libya's state-owned National Oil Corp. (NOC).

"[NOC] has been a primary funding source for the Gadhafi regime," said Adam J. Szubin, director of the US Department of the Treasury's Office of Foreign Assets Control (OFAC).

"Consistent with [United Nations] Security Council Resolution 1973 (UNSCR 1973), all governments should block the NOC's assets and ensure that Gadhafi cannot use this network of companies to support his activities."

OFAC identified the following NOC-owned companies: Arabian Gulf Oil Co., Azzawiya Oil Refining Co., Brega Petroleum Marketing Co., Harouge Oil Operations, Jamahiriya Oil Well Fluids & Equipment, Mediterranean Oil Services Co., and Mediterranean Oil Services GMBH.

Also included on OFAC's list are: National Oil Fields & Terminals Catering Co., North African Geophysical Exploration Co., National Oil Wells Drilling & Workover Co., Ras Lanuf Oil & Gas Processing Co., Sirte Oil Co. for Production Manufacturing of Oil & Gas, Zueitina Oil Co., and Waha Oil Co.

OFAC said US persons are "prohibited from engaging in business with any Libyan state-owned entity," and that "the identifications are intended to aid financial institutions in meeting their obligations under Executive Order No. 13566."

EO 13566 blocks all property and interests in property of the government of Libya and its agencies, instrumentalities, and controlled entities within US jurisdiction, whether specifically identified by OFAC or not.

The Council of the European Union said it also adopted legislation today to implement UNSCR 1973, which broadened the scope of the restrictive measures against Libya imposed by UNSCR 1970 and introduced further measures.

"The assets freeze is extended to the new entities on the UN list under UNSCR 1973, including the NOC and also to five subsidiaries of the NOC designated autonomously by the EU," the Council said, without naming the subsidiaries.

The US and EU announcements followed last week's UNSCR 1973, which ordered an immediate ceasefire in Libya. Tripoli's failure to abide by the resolution led to the launch of military operations led by France, the UK and the US to enforce a no-fly zone in the country.

As the international air campaign continued, Western diplomats neared an agreement to let the North Atlantic Treaty Organization assume responsibility for the no-fly zone, and its warships began patrolling off the Mediterranean coast.

NATO said warships and aircraft of member nations have started patrolling the approaches to Libya's coast as part of Operation Unified Protector. It said their mission is "to enforce the arms embargo called for in [UNSCR 1973]."

Six NATO ships are already in international waters off Libya's coast to monitor and enforce the arms embargo mandated by the UN, and a NATO official said that Allies have already pledged a further 16 ships to the mission.

Patrol aircraft and fighter jets are also heading towards the area of operations to provide long-range surveillance and intercept any suspected flights carrying weapons into Libya.

News of the NATO agreement came after Turkey, reversing an earlier decision, said it would send four frigates, a submarine, and an auxiliary warship to the NATO mission that will enforce the arms embargo off Libya. Turkey previously was the lone hold-out in NATO's vote for action against Libya. Under the NATO charter, all 28 member states must give their approval to NATO's military plans for implementation of the UNSC resolution on the no-fly zone over Libya.

Airstrikes, patrols continue

Meanwhile, the international coalition continued airstrikes and patrols, with unconfirmed reports saying that tanks belonging to forces loyal to Libya's leader Moammar Gadhafi were forced to roll back from the western city of Misrata. So far, however, neither the loyalist nor the opposition forces has mustered enough force for an outright victory, raising concerns of a prolonged conflict.

"At the beginning, we thought it would just take a week or two weeks" to depose Gadhafi, said rebel spokeswoman Iman Bughaigis. "Now we know it will take time."

By nightfall on Mar. 22, Gadhafi insisted he would not surrender. "We are ready for the fight, whether it will be a short or a long one. We will be victorious in the end."

Analysts and traders have continued to express concern over the effects of an extended struggle for control of Libya and its oil and gas industry—including threats by both sides to damage the facilities.

Intervention by the international community means "prolonged increased uncertainty and thus volatility in oil markets" said Johannes Benigni, chief executive officer of Vienna-based consultants JBC Energy GMBH.

"Western oil companies will have to hope Gaddafi does not destroy their facilities," Benigni said, referring to a warning by the Libyan leader.

"We will not leave our oil to America or France or Britain or the enemy Christian states that are aligned now against us," said Gadhafi in a lightly veiled threat to destroy the country's oil and gas facilities in the event his forces are defeated.

Earlier, however, one rebel confirmed that the opposition had procured a handful of "very old" warplanes, and he also warned that rebel forces would now use them to bomb "oil wells and oil sites (OGJ Online, Mar. 21, 2011)."

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