Libya has become the new kid on the block for Alberta companies looking for faraway places to boost their oil and gas reserves.

But they’d be wise to approach the North African country – specifically its erratic leader – with caution.

Libya has been ruled since 1970 by Moammar Gadhafi, who once encouraged terrorists to blow airliners out of the sky. Now his worst sin, since he agreed to dismantle his country’s nuclear weapons program, appears to be his taste in sunglasses.

One of the reasons why Libya looks so attractive to companies such as Nexen Inc. and Talisman Energy Inc. is because a Bush- bungled Iraq now looks so uninviting.

No oil company CEO in his or her right mind would send their employees to a country where it isn’t safe to step outside the door, let alone drive into an oilfield.

Libya, however, with its huge undeveloped crude oil reserves is now Mr. Nice Guy – albeit in shades.

Talisman CEO Jim Buckee said last week his firm is close to striking a deal for a number of exploration blocks in the country. Talisman is already an important player next door in Algeria, where the company expects to produce 16,000 barrels of oil a day this year.

But Talisman should take the cautious road into Libya – if only because the protests of human rights activists, critical of the company’s past involvement in the oilfields of Sudan, are still ringing in shareholders’ ears.

Talisman, which plans to spend a record $2.35 billion on global exploration and development this year, has many options other than Libya to grow its oil production.

To wit: The company’s $189-million purchase last week of privately owned Intrepid Energy’s stake in the Flotta Catchment Area of the North Sea, which will boost Talisman’s production by 5,100 barrels of oil equivalent a day this year and increasing to 9,000 barrels a day next year.

Nexen, which had been interested in expanding into Iraq, has wisely put those plans on hold and is also looking instead at Libya.

But Nexen is treading carefully. For now, CEO Charlie Fischer told shareholders last week, the company’s focus remains on its operations in the Gulf of Mexico, the Alberta oilsands, Yemen and offshore West Africa.

One company that has an inside track in Libya is Petro-Canada, which, through its predecessors, has operated there for more than 40 years.

Through its 49-per-cent interest in Veba Oil Operations, a joint venture with the National Oil Corp., of Libya, Petro-Canada has become one of the country’s largest producers.

Offshore Incentive

While home-grown producers head overseas to hunt for oil and gas, the federal government wants to attract more offshore drilling rigs to Canadian waters.

Natural Resources Minister John Efford has announced a five-year moratorium on federal duties – worth about $50 million to Ottawa – imposed on temporary imports of offshore drilling rigs.

The incentive, which will lower exploration costs for Canadian firms by up to $50,000 a day, should boost offshore activity in Atlantic Canada – including Efford’s home province of Newfoundland.

John Efford

The move will also please the Canadian Association of Petroleum Producers and the Canadian Association of Oilwell Drilling Contractors, which considered the duties to be hindering offshore exploration.

EnCana Corp., which is reviewing how best to develop its $1.1-billion Deep Panuke project offshore Nova Scotia, also had been lobbying for government incentives to help lower exploration costs.

Ottawa showed some smarts in planning the five-year experiment. The feds consulted not only oil and gas explorers, but also the Shipbuilding and Industrial Marine Advisory Committee and other labour stakeholders in Canada.

Wanted: Windex

Dow Chemical Canada is doing some serious ‘spring cleaning’ at its Fort Saskatchewan petrochemical plant near Edmonton – to the tune of nearly $60 million.

More than 900 Edmonton-area workers will earn about $23 million for the six-week maintenance and improvement “turnaround” project, the company says. Another $20 million will be spent on services in the Alberta capital region.

Dow Chemical’s plant is the second largest in the world for converting ethane in natural gas into the petrochemical raw material used in manufacturing synthetics.

The tune-up includes $40 million on maintenance and $18 million on production, reliability, environment, health and safety improvements.

Wonder if they’ll have time to do my windows?

Team Players?

Competition to build the $20-billion US Alaska Highway pipeline project is looking more and more like a relay race.

Enbridge Inc. of Calgary says it has filed an application with the state of Alaska to negotiate a deal to build and operate the 1,200-kilometre segment of the pipeline from Alaska’s Prudhoe Bay in the North Slope to the Yukon border.

Enbridge’s application comes less than two weeks after Calgary-based TransCanada Corp. invited northern aboriginal communities to become ownership partners in the 1,600- kilometre Yukon, B.C. and northern Alberta legs of the pipeline.

TransCanada president Hal Kvisle says his company intends to take the leading role in building the Canadian section as an extension of its own pipeline network. The company also intends to file its own application to build the Alaska portion of the pipeline.

But Kvisle also noted that the options in Alaska are wide open for assembling a sponsor consortium that could include gas producers, other pipeline operators and American aboriginal corporations.

Enbridge, which owns 100 per cent of the Norman Wells liquids pipeline and 33 per cent of Inuvik Gas in the N.W.T., has extensive experience building and operating pipelines in northern permafrost.

If Enbridge and TransCanada can agree on a route for the Alaska Highway pipeline – and that’s a still a big ‘if’ – they’re headed for a partnership on this project.

Rail Reaction

The big iron wheels might be coming off a proposed $1.8-billion choo-choo to the oilsands, before the train even pulls out of the station.

According to a report, the head of Canada’s largest oilfield trucking firm says recent project cost overruns in the oilsands have nothing to do with transportation costs for equipment and workers.

Murray Mullen, chairman and CEO of Mullen Transportation Inc., said he opposes the province putting public money into an upgraded rail link to Fort McMurray.

The Aldersyde, Alta.-based company ranks among Canada’s top 10 trucking firms, with 2003 revenues of $421.5 million. Its fleet of 3,700 trucks, tractors and trailers serves customers across Western Canada, including oilsands producers Syncrude, Suncor and Shell Canada.

Mullen, of course, has a vested interest in keeping his trucks to the oilsands fully loaded and busy.

But given that some of the oilsands operators themselves are balking at the rail line’s cost, it would be better to abandon this Klein caboose at the platform.