Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Shukri Ghanem, left, chairman of Libya's National Oil Corp., shakes hands with Ron Brenneman, chief executive officer of PetroCanada, during a December 2007 meeting in Tripoli. (Mahmud Turkia/AFP/Getty Images/Mahmud Turkia/AFP/Getty Images)
Shukri Ghanem, left, chairman of Libya's National Oil Corp., shakes hands with Ron Brenneman, chief executive officer of PetroCanada, during a December 2007 meeting in Tripoli. (Mahmud Turkia/AFP/Getty Images/Mahmud Turkia/AFP/Getty Images)

Time to Lead

How Canadian companies navigated the complexities of dealing with Libya Add to ...

Near the centre of Tripoli sits the bunker, residence and military command post of Moammar Gadhafi.

It is hidden behind three concentric rings of defensive walls. It is a fortress that sprawls over six square kilometres. But for much of the past decade, those working hardest to penetrate it have not been citizens rising up against a despot. They have, instead, been wealthy Western companies, intent on wringing riches from the Libyan desert's massive oil reserves.

For some of them, gaining access to Col. Gadhafi - whether directly, or through one of his powerful sons, or through a shadowy network of well-connected "consultants" - was just one of the many challenges of operating in a country some remember as downright bizarre.

Libya, recalls Jim Buckee, the former chief executive officer of Talisman Energy Inc., which spent years attempting to gain land for oil exploration in Libya, has "got all these strange characters with influence. It reminded me of the courts of Medici. The place is medieval."

For oil companies, the work of navigating ancient kingdoms and secretive relationships has become an integral part of finding new reserves. The search for energy "elephants" - major fields that are increasingly unlikely to be found closer to home - has led the industry, including its Canadian participants, to the most difficult corners of the earth.

In the process, it has forced them to confront a series of vexing questions. How, when dealing with dictators, graft and unfamiliar practices, are companies to act? To what standard of moral responsibility are executives to be held? And if so, is it more responsible to produce the energy that fuels the global economy, or to avoid enriching leaders with unseemly track records?

For Canadian companies, even North American laws aren't perfectly clear on some key issues. Due to a legal loophole that allows so-called "facilitating payments" to foreign officials, many wonder: What's a bribe? And with Canadian anti-corruption laws responsible for only one conviction in more than a decade, is there any real risk of punishment?

For those forced to face these questions head-on, the answers have not been simple.

"Life's not perfect," said Peter Kallos, who served as executive vice-president of Petro-Canada's international and offshore division for much of the past decade. "You decide whether or not you're comfortable doing business in Country X. If you decide you are, then you're going to do that business in a way that fits within your standard ethical framework as best you can. And Even in countries where the regime is perhaps distasteful, the people are not."

It's not an easy calculation, especially since things often sour. In addition, countries responsible for heinous acts have often held substantial promise. Take Colombia, which has wooed major investments in part through its substantial success in attacking violence. Then, earlier this month, 23 Talisman workers were briefly kidnapped.

Or take Libya, which in the early 2000s was home to an international swooning that saw the United Nations lift sanctions, hosted visits by global leaders - including Canada's Paul Martin - and gave off a general sense that its terrorist past was no more.

"It was a wave of, I guess, goodwill at the time," said Jim McFarland, the former chief executive of Verenex Energy Inc., whose success in Libya was complicated by government interference when it attempted to sell.

When regimes sour, however, the questions become trickier.

The same was true in Sudan. Talisman is most often remembered for helping create wealth for a government that was bombing killing its own people. What is sometimes forgotten is that the company's investment was made during a time of promise.

"They were going to hold elections in four years time," Mr. Buckee said. "It seemed to be all pointing in a positive direction."

Then things fell part. Days after Talisman announced a deal to buy in to a Sudanese oil investment, for example, the U.S. bombed suspected terrorist sites in the country. Then Sudan's killing of its own people began to attract substantial international attention.

Report Typo/Error
Single page

Follow on Twitter: @nvanderklippe

Next story




Most popular videos »

More from The Globe and Mail

Most popular