LIBYA: LAW NATIONALIZING BRITISH PETROLEUM EXPLORATION COMPANY (LIBYA)Source: International Legal Materials, Vol. 11, No. 2 (MARCH 1972), pp. 380-382Published by: American Society of International LawStable URL: http://www.jstor.org/stable/20690891 .

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380

LIBYA: LAW NATIONALIZING BRITISH PETROLEUM EXPLORATION COMPANY (LIBYA)* [December 7, 1971]

The Revolutionary Command Council issued a law on 7 Dece

mber nationalizing the British Petroleum Exploration Co.

( Libya ) Ltd. in the Libyan Arab Republic. Following is the text of this Law :

In the Name of the People, The Revolutionary Command

Council,

In accordance with Constitu

tional Declaration No. 1 of 2 Shawwal, 1389 H.

In accordance with Petroleum

Law No. 25 of 1955 and subse

quent amendments thereto.

In accordance with Law No.

24 of 1970 regarding the establi shment of the National Oil Corp. and subsequent laws amending some of its provisions.

In accordance with the Com

mercial Code and with Law No.

65 of 1970 regarding certain

provisions related to business

men and commercial companies and supervision thereof.

In accordance with Oil Con

cession Deed No. 65 and related

agreements, and,

In accordance with the pro

posal of the Prime Minister and

the approval of the Revolutio nary Command Council thereto, HAS ISSUED THE FOLLOW ING LAW :

Article 1

Activities of the British Petr oleum Exploration Co. ( Libya ) Ltd. in Oil Concession No. 65 shall be nationalised and shall become the property of the Sta te all funds, rights, assets and shares related to such activities

including specifically installa tions and utilities of crude oil and natural gas prospection,

drilling, extraction, transporta

tion, separation, storage and

export as well as other assets

and rights pertaining to the said activities.

Article 2

A Corporation enjoying the Libyan Arab Republic Nationa

lity shall be established with a

capital wholly owned by the National Oil Corp. ( N.D.C. ) and shall be called, "THE

ARAB GULF EXPLORATION CORP." to which shall be tran

sferred all funds, assets and

rights of B.P. Exploration Co.

( Libya) Ltd. which has become

the property of the State in accordance with the preceding article.

The Arab Gulf Exploration Corporation ( AGEC ) shall not be liable for any previous obli

gations related to the nationali zed activities except within the limits of what has become the property of the State in funds,

rights and assets. The object of this Corporation shall be the production of crude oil and na

tural gas, purification, storage

and export operations as well as other works related thereto

whether they are located in the Concession Area mentioned in

the preceding article or in any other areas fixed for it by the Board of Directors of the Nati onal Oil Corporation ( N.O.C. ).

Article 3

The Arabian Gulf Exploration Corporation shall have the right to execute current crude oil sale contracts related to the nationa

lized activities, and to amend or

cancel them as it may deem suitable for public interest. Its decision shall apply also to the

*[Reproduced from an English translation which appeared in the Arab Oil Review, A Review of Oil Industry Published in Libya, September-Decem ber, 1971.

[The Italian Court proceedings concerning the BP Exploration Company's claim to oil imported from Libya appear at I.L.M. page 328.]

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other partner in Concession 65 mentioned above.

Article 4 The Arabian Gulf Explora

tion Corporation shall pay to the State's Public Treasury tro

ugh the Ministry of Petroleum all fees, rents of land, royalties, taxes and surtaxes which had

been applied to B.P. Explora tion Co. (Libya) Ltd. such fees, rents, etc. that have become

due with effect from the effe ctive date of this Law in acco dance with the provisions of the Petroleum Law, and the

above mentioned Concession

Deed and subsequent amend

ments thereto.

Article 5 The State shall pay the party

concerned compensation for all

property of funds, rights and assets transferred to it in acco

rdance with the provisions of Article 1 above. Such compe nsation shall be determined by a Committee to be formed by

Minister of Petroleum Decision

as follows :

(a) A counsellor of the Cot* rts of Appeal nominated

by the Minister of Justice - Chairman.

(b) A representative of the National Oil Company ( N.O.C. ) nominated by the Minister of Petroleum - Member .

(c) A representative of the

Ministry of Treasury no

minated by the Minister of Treasury

- Member.

Article 6

Necessary amounts for settle ment of taxes and fees due to the Treasury and any other debts related to the activities nationalised shall be deducted from the value of compensa tion which shall be fixed for

the party concerned in compli ance with the provisions of the preceding article, and that within the limits of the value of said compensation. Creditors in

the preceding paragraph shall submit statements of the debts due to them supported by docu mentary evidence to the Com mitte provided for in Article 5 within a period of 30 days from the date of issue of a decision of the Committee's formation.

Article 7 The Committee provided for

in Article 5 above shall issue a decision fixing the amount of compensation and deductions of debts therefrom within a maximum period of three mon

ths from the date of the deci sion for its formation. The

Committee's decision shall be

justified and conclusive and shall not be subject to any sort of appeal. Such decision shall be sumbitted to the Minister of Petroleum for communication to the party concerned within

30 days from the date of its issue.

Article 8

Within a maximum period of three months from the effective date of this Law a Council of

Ministers' Decision shall be issued upon the recommenda tion of the Minister of Petro

leum, in which shall be limited the Arabian Gulf Exploration Copporation's statutes, capital,

legal address, by-laws, manner

of drawing its budget and bala nce sheets and other related

affairs within the limits of this law, and Law No. 24 of 1970

without any recourse to or abi

dance with the provisions of the Code of Commerce and Law No.

65 of 1970 mentioned above.

Article 9

The Board of Directors of A.G.E.C shall be compssed of

381

6 members including its Dire ctor General who shall also be the Chairman of the Board. Appointment of the Board of Directors members and their remuneration shall be made by decision issued by the Council of Ministers upon the recomme

ndation of the Minister of Petroleum.

Article 10

The Board of Directors shall enjoy the broadest authorities in administering and managing

A.G.E.C's affairs, laying down

its general policy, and drawing its financial and administrative

regulations with the exception of the prerogatives clearly mai ntained for the A.G.E.C's Gene ral Assembly in accordance its statutes.

Article 11

A quorum of A.G.E.C's Board of Directors shall be established upon the presence of a majority of its members. Its decisions shall be issued by majority of present members and in case of a tie, the Chairman's vote shall

be decisive.

Article 12

The Chairman of. A.G.E.C's Board of Directors shall under take to achieve the AGEC's

objectives and shall administer and run its affairs in accorda nce with the provisions of its bye-laws.

. Article 13 . ...

The Board of Directors of the National Oil Company (N.O.C.) shall enjoy the prerogatives of the General Assembly in AGEC.

Article 14

AGEC shall have a special budget prepared along the same bases as those of commercial

eneterprises. Its net profits after deducting reserve funds

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382 and oth^r sums provided for in

AGEC's Bye-rLaw^, shall be tra

snferred to the National Oil

Company. Until the first bugget for AGEC is drawn,, the Gover nment shall appropriate the

necessary amounts for AGEC's

operations.

Article 15

AGEC shall have one or more

chartered accountants whose

duties, prerogatives and respo nsibilities shall be fixed in acco

rdance with laws in force.

These accountants shall be assi

gned, nominated and their rem

unerations fixed by a decision

issued by N.O.C.'s Board of Dir

ectors. A chartered accountant

shall substitute the Control

Committee provided for in the

Code of Commerce.

Article 16

Rules and regulations applied in the Government shall not

apply vis-a-vis AGEC's assets,

operation, and personnel emplo

yed therein.

Article 17

Employees and workers Qf

Libyan Arab Nationality emplo

yed by the Company mentioned

in Article 1 hereof shall be atta

ched to AGEC and may not

resign or decline to work the

rein unless any of them is reli

eved thereof by decision from

AGEC's Board of Directors.

Foreign workers and employees shall have the choice to continue

their work with the new com

pany or resign therefrom. All

workers and employees, whe

ther local or foreign who shall

choose to remain in the new

Corporation shall maintain their

present level of wages and sala

ries. By decision issued by the

Minister of Petroleum, upon the

recommendation of the Chair

man of N.O.C.'s Board of Direc

tors, any employee or worker

of Iibyan Arab Republic citize^ nship working in any other

company may be delegated to

work with AGEC which shall pay them their salaries and allo wances established in their ori

ginal assignments, during the

whole period of their delega tion.

Article 18

A committee or committees

to take charge of receiving the

funds, assets and rights of the

nationalised activities shall be

formed by decision of AGEC's

Board of Directors. And by decision issued by the Minister

of Petroleum upon the recom

mendation of the N.O.C.'s Cha

irman of the Board of Directors

of the National Oil Company; this Committee or Committees

may be formed from members

of AGEC's Board of Directors

employees of the Governments, Public establishments or corpo

rations, or employees of the

Company mentioned under Arti

cle 1 above.

Article 19

Any contract, disposal or

action taken contrary to the

provisions of this Law shall be

considered null and void. Banks,

organizations or individuals are

prohibited from settling any claims or dues by the party con

cerned in this law unless appro ved by the AGEC's Board of

Directors.

Article 20

Any person violating any of

the provisions of this Law shall

be subject to two years' impri sonment and to a fine not less

than 500 Libyan Dinars or to

either penalty. And any one vio

lating the provisions of the pre

ceding article shall be subject

to a penalty equal to three

times th? amount of jnpney lost by the state as a jegult of such violation.

Article 21

The Minister of Petroleum shall be charged with execution of this Law which shall become effective from the date of its

issue and shall be published in the Official Gazette,

Revolutionary Command Cou

ncil ( Sgd ) Col. Muamfnar

Gaddhafi Prime Minister

Issued on 20 Shawwal, 1391 H.

Corresponding to 7 December, 1971 AD.

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