Jan. 27--Libya believes $100 a barrel is a fair price for crude, and the nation won't rule out nationalizing its oil industry in response to current lower prices, the Libyan ambassador to the U.S. said in Houston today.

In a luncheon speech to the Bilateral US-Arab Chamber of Commerce, Ambassador Ali Suleiman Aujali said his north African nation is open for business and needs investors in the energy sector as well as expertise on infrastructure projects, such as highways, hospitals and hotels.

But in an interview after his speech, Aujali said he could not guarantee that Libya would not nationalize energy interests--an idea Libyan leader Moammar Gadhafi floated in a speech last week.

"There is no firm yes and there is no firm no," he said.

"Who would have believed the American government would be so involved in the American economy the way it is now?" Aujali asked, referring to the U.S. federal government's trillion-dollar bailout of numerous banks and the auto industry. "They had to do it because it needed rescuing."

The rapid drop in the price of crude has taken a toll on the budgets of Libya and many other oil producing nations. Libya, the largest oil producer in Africa, gets virtually all of its government funding from the oil and gas industry. Control of the industry might give it some ability to push prices up by squeezing production.

Economic sanctions kept U.S. companies from investing in Libya for 25 years because of its link to terrorist attacks in the 1980s, including the 1988 bombing of Pam Am flight 103 over Lockerbie, Scotland.

In 2004, the Bush Administration lifted the barriers after Libya agreed to pay reparations. In 2005 Houston companies Marathon Oil, ConocoPhillips and Amerada Hess re-entered the country and took up stakes in the resource-rich Waha concession in the desert they were forced to forfeit years earlier.

Around the time U.S.-Libyan relations were thawing, the price of oil began to climb, rising from around $40 a barrel to more than $140 a barrel last summer. The benchmark price of crude has since sunk back to around $40 a barrel, but the price of doing business in the oil patch has not dropped as fast, forcing many projects into question.

Aujali said Libya has had the biggest budgets in its history in the last three years, with much of the government's spending focused on upgrades to its infrastructure. The ambassador would not say what price per barrel Libya based those budgets on, but said oil should be selling for around $100 a barrel.

"$100, we think is fair," he said.

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