Libya's Ghanem Says No Link Between $900M BP Deal,Megrahi Release

20th Jul 2010 04:51

(This item was originally published Monday.) DUBAI (Zawya Dow Jones)--Libya's top oil official has rejected suggestions that a $900 million oil deal awarded to U.K. oil major BP PLC (BP) in 2007 was linked to the release of convicted Lockerbie bomber Abdel Baset Al Megrahi. "I was leading the negotiations and BP was awarded the deal because it offered the best proposal compared to its competitors," Shokri Ghanem, chairman of Libya's National Oil Corp., or NOC, told Zawya Dow Jones by telephone from Tripoli on Sunday. BP won the Libyan exploration and production contract and signed the deal in May 2007. The deal, worth at least $900 million, was for the onshore Ghadames and offshore Sirt areas, covering an exploration area of around 54,000 square kilometers. The agreement was finalized and signed by BP's group chief executive officer Tony Hayward and NOC chairman Ghanem at the time. Ghanem's comments come as four U.S. senators from New York and New Jersey, seeking an investigation into Al Megrahi's release from prison last year, are calling on BP to suspend its oil drilling plans in Libya until it can be determined whether the oil giant played any role in his release in exchange for a contract. A top U.S. Senate committee is set to hold a hearing into events leading up to Al Megrahi's release later this month. BP is already under fire in the U.S. over the Gulf of Mexico oil spill disaster. Analysts said oil companies have traditionally lobbied governments for their interests in the past. "International oil companies have always used their influence to win contracts in countries with oil and gas; their regional offices gather intelligence and lobby to support their long-term interests as this is their core business," said Kamel Al Harami, Kuwait-based oil analyst. BP has not started drilling off Libya's shores so far but is set to begin later this summer. Eckart Woertz, chief economist at the Dubai-based Gulf Research Centre, said whatever the investigation on BP will find, it is unlikely to impact the firm's operations in Libya because it is not under U.S. jurisdiction. "The U.S. can only inflict indirect pressure on BP by threatening BP business interests in the U.S.," Woertz said. Al Megrahi, the only person convicted in the 1988 bombing of Pan Am Flight 103, which killed 270 people--including 189 Americans--when it exploded over Lockerbie, Scotland, was freed in August 2009 because he was thought to have just months to live. He is still alive in Libya. According to the Scottish and U.K. governments, Al Megrahi wasn't released because of any deal between the U.K. and Libya. BP has said it had no role in the Scottish government's decision to grant compassionate release to Al Megrahi. -By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; [email protected] Copyright (c) 2010 Dow Jones & Company, Inc. (END) Dow Jones Newswires July 19, 2010 23:51 ET (03:51 GMT)