Analysts say Libya wants ties to U.S.

CAIRO, Egypt — Libya hopes to reopen relations with the West and gain lucrative oil contracts blocked by U.S. sanctions as well as reap other economic benefits by abolishing weapons of mass destruction, analysts say.

Under the surprise disarmament agreement by Libyan leader Moammar Gadhafi, Tripoli will open its nuclear activities to spot inspections by the U.N. watchdog agency, a diplomat said Sunday. Libya believes that decision, made Saturday as a Libyan delegation met with International Atomic Energy Agency director general Mohamed ElBaradei, will return the country to the good graces of the international community.

"We are turning our swords into plowshares, and this step should be appreciated and followed by all other countries," Libyan Prime Minister Shukri Ghanem told the British Broadcasting Corp. — a clear reference to the United States, the one country that maintains sweeping sanctions.

The United States imposed sanctions in 1986, accusing Libya of supporting terrorist groups. Ten years later, America passed the Iran and Libya Sanctions Act that threatened to penalize the U.S. partners of European companies that did significant business in Libya and Iran.

With Friday’s decision, Libya believes it has wiped the slate clean.

"What Gadhafi is striving for is re-acceptance into the community of nations," said Henry Schuler, a Libyan specialist who has met Gadhafi and spent eight years in the North African country as an American diplomat and an oil company executive.

So far, Gadhafi seems to be winning friends, even in places where he might not want them.

Israeli Foreign Ministry spokesman Jonathan Peled said Sunday that the move on weapons of mass destruction could lead to his country’s establishing relations with Libya. However, Libya’s state-run press made clear that Israel would have to follow suit with its weaponry.

Saad Djabbar, a North African expert at Cambridge University, said what Libya seeks is normalization with the United States and the removal of all sanctions.

American oil companies own joint-venture concessions in the Libyan oil fields, but sanctions have blocked them from developing those fields. Oil experts say their Libyan state partners are now operating the fields, but at levels far below their potential.

"With U.S. investment, Libya can become a world class oil producer," oil industry consultant Peter Gignoux said. The American companies "hold the best concessions and they have got very good technology."

Djabbar said Libya knows that once American companies have re-established themselves, "they would enhance the pro-Libyan lobby in Washington."