With oil prices hitting a record $50 a barrel last week--and with continued violence in Nigeria, Saudi Arabia and Iraq--Libya is being hailed as an El Dorado for war-weary U.S. oil majors. "Libya is booming," says ChevronTexaco's Julian Singer in North Africa. "It's one of the safest countries in the region right now." President George W. Bush has lifted a raft of sanctions on the former pariah state, paving the way for U.S. companies to negotiate access to Libya's 36 billion barrels of proven reserves of low-sulfur "sweet oil." Now Tripoli's once empty hotels are filled with U.S. oil reps hoping to elbow back into the market. Some of them never really left, though: Halliburton, for one, used a loophole in U.S. sanctions by having a German subsidiary manage vast projects in the country. The question now is how long it will take Libya to get up to speed in terms of production. The country now pumps about 1.5 million barrels per day, but with more foreign investment, the Libyans could double that figure. And while Libya remains on the State Department's list of countries that sponsor terrorism, that isn't stopping anyone from trying to cut deals. The country is only 25 percent explored, and an upcoming bidding round will see 15 chunks of the Libyan desert go on the auction block. Even with Libya's endless red tape, there should be more than enough oil to go around. And for U.S. oil companies, that is a sweet prospect indeed.
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