OTTAWA — A newly leaked U.S. diplomatic note says Libya threatened to nationalize Petro-Canada’s operations in the North African country over a spat with the Conservative government.
It’s the latest revelation in a bizarre international saga that first grabbed headlines two years ago.
Libyan leader Moammar Gadhafi cancelled a late September 2009 stopover in Newfoundland after Foreign Affairs Minister Lawrence Cannon promised a tongue-lashing for the hero’s welcome Libya extended to a man convicted in the Lockerbie bombing.
The U.S. cable, obtained from WikiLeaks by British newspaper the Daily Telegraph, says Libya’s state oil company called in a senior Petro-Canada official with a threat to nationalize the firm’s operations in Libya if Canada did not apologize.
At the time, Petro-Canada had just merged with fellow Canadian oil giant Suncor.
The cable says Canada’s ambassador to Libya, Sandra McCardell — whose name is misspelled throughout — told the U.S. Embassy in Tripoli the Libyans demanded the apology within 24 hours.
“McArdle said she has advocated some kind of public and private statements from the Canadian (prime minister) and (foreign minister), which would indicate a Canadian welcome for the Libyans and hopefully turn the situation around,” the cable says.
“Libyans here are frantically calling the Canadian Embassy, concerned that if the issue is not resolved, Gadhafi’s trip home will be complicated by lack of a place to stop for necessary refuelling.”
The Sept. 28, 2009, cable also says McCardell told her U.S. counterpart that Ottawa had initially planned to refuse the eccentric Gadhafi permission to stop on Sept. 29-30 in Newfoundland en route to Spain from the United Nations.
“On instructions from Ottawa, McArdle said that she informed the Libyan government in mid-September that Gadhafi was not welcome to visit Canada at this time,” the cable says.
It adds that McCardell, who had just arrived in Tripoli and had not yet presented her diplomatic credentials, seriously believed she could become persona non grata or have her agreement revoked.
“Fearful of delivering bad news to Gadhafi, McArdle explained that the notoriously slow Libyan bureaucracy delayed passing Ottawa’s message to the Leader for several days.”
In the meantime, Canadian companies with business interests in Libya “launched a furious lobbying effort” and persuaded Stephen Harper’s Conservative government to allow the trip to go forward, the note says.
“However, McArdle said that the Canadian government’s precarious domestic situation and upcoming elections pressed the Foreign Minister (Cannon) to go public with his very stern message.”
Though Gadhafi’s government did not follow through on its apparent threat to take over Petro-Canada’s operations, a second WikiLeaks cable obtained by the Daily Telegraph indicates it doled out a milder punishment.
The Libyan government issued an order Sept. 30, 2009, forcing Petro-Canada and its operator, Libya’s Hrouj company, to cut production by 50 per cent, the note says.
The move came less than a day after McCardell had told the U.S. ambassador that she and Libya’s foreign minister had settled the issue.
The U.S. cable says while reasons for the production cut were unknown, a source whose name is excised from the note “intimated that the order had come from the highest levels, i.e. Moammar Gadhafi himself.”
The move may be a “cheap” way for the Libyans to punish Petro-Canada for Ottawa’s gruff words, it adds.
Diplomats from Britain and Italy, nations with significant investments in Libya, appeared unsettled by the news, the note says.
Indeed, the earlier cable reveals both Britain and the United States were prepared to intervene on Petro-Canada’s behalf “to emphasize that it is not good for Libya to threaten existing and potential investors and violate the sanctity of contracts with such abandon.”
“The situation between the Libyans and the Canadians reflects vintage Libyan policy to strike hard at any quarter that insults the Leader publicly.”
In October 2009, Libya retaliated further, making it clear that Canadian travellers were not welcome in the country by refusing to grant visitor visas.