The Interior Department reversed itself yesterday and agreed to let Kuwait explore for minerals on federal lands, even though U.S. citizens are not permitted the same rights in the oil-rich Persian Gulf nation.
In his last official act as interior secretary, William P. Clark declared Kuwait a "reciprocal" nation under the Mineral Lands Leasing Act, citing a U.S. District Court ruling last month that Kuwait was not discriminatory in its treatment of foreign oil investors.
In 1983, then-Secretary James G. Watt refused to grant Kuwait access to mineral leases in the United States, charging that the nation had barred U.S. corporations while allowing Japanese, British, Dutch and Spanish interests to hold petroleum concessions.
But the U.S. District Court in Delaware ruled that the other foreign interests were operating in an area that was involved in a territorial dispute between Kuwait and Saudi Arabia. No foreign interests are permitted in areas clearly under Kuwait's control, the court said, and it ruled that the policy was therefore not discriminatory.
Under the provisions of the 1920 mineral leasing law, foreigners may not hold U.S. mineral exploration leases unless their country grants American citizens similar rights. However, Watt already had granted reciprocal status to Canada, Cyprus and Sweden -- all of which restrict foreign investment in energy resources -- after deciding that the restrictions were evenly applied to all foreigners.
Granting reciprocal status to those nations stirred some controversy, but the Kuwait decision was viewed as potentially more far-reaching. Not only does Kuwait have significantly more capital to invest, but it also frequently acts as a leader for other Mideast nations.
The ruling means that the Kuwaiti national oil company may develop more than $10 million worth of energy exploration leases in Oklahoma, Louisiana and Colorado. The leases were held by the Santa Fe International Corp., a California-based oil firm that Kuwait bought for $2.5 billion in December 1981. Kuwait is believed to have extensive applications pending for other mineral leases as well.