A Canadian suspected of industrial espionage on behalf of the United States has been prevented from leaving Libya for security reasons, the newspaper Oea reported on Monday.

It said Douglas Oriali, who also has Australian and Irish citizenship, is suspected of working with US intelligence "to gather information aiming to ensure the failure of a drilling project off the Libyan coast by Britain's BP."

The paper quoted "a senior official" as saying that Oriali on arrival said he was an archaeologist visiting Libya as a tourist.

Oriali was placed under surveillance, the official said, adding he was then prevented from leaving the country after "contacts with a US diplomat in Libya who is suspected of being an intelligence agent."

The Canadian embassy, contacted by AFP, refused to comment.

However, the newspaper quoted "sources from the embassy" as saying Oriali is being held at his Tripoli hotel and that he has been questioned twice by Libyan security and that his laptop and mobile phone have been confiscated.

Oea said that under questioning, Oriali supplied the authorities with his Internet banking details and information about the content of emails.

BP has said it would start drilling off the Libyan coast during the second half of the year under a 2007 deal with Tripoli allowing it to drill five wells in the Gulf of Sirte at depths of about 1,700 metres (5,500 feet).

That is slightly deeper than the Gulf of Mexico BP well that ruptured on April 20, causing the worst US environmental disaster on record.

On September 7, the Libyan government website said the country has no stake in BP or any other international oil firms, countering speculation to the contrary.