For the first time, the Department of the Interior will bar a foreign government and its citizens from owning interest in federal mineral leases in the United States, although that decision yesterday may prove to be unenforceable and cost jobs here.
Interior Secretary James G. Watt said that residents of the Persian Gulf country of Kuwait no longer will be allowed to own personal or corporate interest in certain minerals that can be leased on U.S. property, such as oil, gas, phosphate and sodium.
"Because we are committed to free trade that works in both directions, we cannot condone practices which shut out Americans while allowing access to citizens and corporations of other nations," Watt said, declaring Kuwait a "non-reciprocal nation" under the 63-year-old Mineral Leasing Act. "[Kuwait] is discriminating against U.S. citizens and corporations," he said, while allowing petroleum concessions held by Japanese, British, Dutch and Spanish interests.
However, the Santa Fe International Corp., a $2.5 billion U.S. energy firm owned by the Kuwait national oil company, and the American-Jewish Committee say Watt is wrong; that it is the state policy to bar all foreign nationals from on-shore mineral leasing in Kuwait.
The decision would not affect Kuwaiti interests on private lands in the United States, outer continental shelf oil and gas drilling or in federal permits affecting the most common hard-rock minerals, such as gold, silver or copper. Interior officials said that although lease applications for federal lands show foreign ownership of 5 percent or more, statistics have never been compiled on where the Kuwaiti holdings are.