It was a spectacle that was unimaginable a scant year ago.
The summit in the desert had Canadian Prime Minister Paul Martin hailing his host as a man who understands the “abuse of human rights cannot continue,” and Libyan strongman Moammar Gadhafi praising the Canadian people for the democratic “progress they have achieved so far.”
Martin himself looked more bemused than amused by his encounter with the one-time Mad Dog of the Middle East on Dec. 19, the anniversary of the day Gadhafi made an abrupt about-face, renouncing support for terrorism and abandoning his program for weapons of mass destruction.
The subsequent events, as Gadhafi has been embraced by a succession of western leaders, have seen Libya emerge from more than a decade of international isolation.
But the mercurial nature of the dictator is largely unchanged. Despite the importance to Libya of the high-level trade mission, the Canadian delegation were not sure when Martin and Gadhafi would get together in the Bedouin tent.
One source in Martin’s office told reporters that it could happen at first light, or it could happen at midnight.
In the end, there were two meetings that ranged over a full agenda from Libyan history to human rights and judicial reform. The formal business ended with Gadhafi speaking of his new-found friendship with Martin.: “We shall always be friends even if he is not the prime minister,” he proclaimed, adding a mischievous comment that perhaps Canada might evolve from a nation to a Libyan Arab Jamahiriya (“a state of masses.”)
Real purpose economic
Outside the big tent, the real purpose of the visit was unfolding, including a business roundtable of Canadian corporate executives and Libyan government officials.
A spokeswoman for Canadian Foreign Affairs Minister Pierre Pettigrew said the purpose was to “promote economic reforms and encourage Libya to look toward Canadian investment.”
One bold step in that direction saw the two sides sign a memorandum of understanding with Montreal-based engineering giant SNC-Lavalin involving the C$1 billion Great Man-Made River Project that aims to deliver water from vast aquifers beneath the Sahara Desert to Libya’s thirsty coastal population. That touch of symbolism was seen as a door opener for Canadian involvement in developing Libya’s oil and gas riches, along with civil engineering and aerospace contracts.
Petro-Canada Chief Executive Officer Ron Brenneman was among executives from four Calgary-based companies — Talisman Energy and Nexen also planned to attend — laying the groundwork to compete with 59 other countries in a bidding round scheduled for Jan. 10, with the results to be revealed on Jan. 29.
The offer of 15 new exploration prospects drew interest from 122 companies, 63 of which got the green light to bid, enticed by Libya’s plans to more than double its oil production to 3 million barrels per day by 2010 and develop its under-exploited gas reserves, partly through new liquefied natural gas exports.
Delegates from several U.S. firms, including ConocoPhillips, Marathon Oil, Amerada Hess, ChevronTexaco and Occidental Petroleum, met with Libya’s key oil industry leaders earlier in December, signaling their desire to close the gap on European rivals such as France’s Total and Spain’s Repsol, who have forged strong positions in Libya, untroubled by years of U.S. sanctions.
Petro-Canada is also strongly placed since its takeover in 2002 of Germany’s Veba Oil & Gas, which had 40 years of involvement in Libya.
That deal gave Petro-Canada a 49 percent stake in Veba Oil, a joint venture with National Oil Corp. of Libya, which explores and produces in eight concessions, including a net 50,000 bpd for Petro-Canada from 20 fields.
Brenneman told analysts before he left for Libya that he did not expect any major developments.
All a spokeswoman for Petro-Canada would confirm for Petroleum News was that Brenneman has taken part in confidential high-level meetings.
Talisman and Nexen are constantly scouting for global opportunities and both have experience in challenging political environments — Talisman in Tunisia, Algeria and Sudan and Nexen in Yemen.
The roll-call for the bidding round also includes BP, Royal Dutch/Shell, with industry insiders expecting China’s state-owned energy companies to provide stiff competition.
But not all observers view Libya as low-hanging fruit, ready to be plucked.
Although an estimated 75 percent of the territory has not been explored, analysts caution that Libya is far from a wide-open prospect just because U.S. companies have not been active since 1986.
They warn that Libya could be a replica of Venezuela, where a feeding frenzy in the 1990s saw companies fight for a strategic toehold without paying enough attention to the reserves.
Some believe the National Oil Corp. will opt for a strategy that will result in fewer large companies taking dominant “anchor” positions.
