Libya hasn't poisoned any dog food or toothpaste, but the US prefers China to Qaddafi's country. I understand the history of US-Libya relations, but I also understand the present and future of Peak Oil.

Situated handily on the southern Mediterranean coast across from southern Europe, the North African country of Libya isn't nearly as far-flung as the North Pole. Yet the United States is taking much greater interest in the potential of "undiscovered reserves" up under Santa's workshop than it is in the nearest part of the Near East. Why's that?

After all, industry estimates show that Libya holds the world's cheapest black gold. Its oil fields lay dormant for most of the past two decades while western nations tried to pressure Libya into renouncing terror and handing over suspects in the infamous Lockerbie bombing of 1988 (Pan Am Flight 103). But in the wake of the Iraq invasion of 2003, Libya decided to come in from the cold, bringing proven reserves of nearly 42 billion barrels with it.

That total makes it tops in Africa, where the world's oil majors and national consumers are salivating over 114 billion bbl as the Middle East writhes in disaster.

Of course China, whose energy consumption is outstripping its incredible double-digit economic growth, is marauding for drill holes everywhere from Gibraltar to the Cape of Good Hope. President Hu Jintao went on an eight-nation African resource safari last year (his third trip to the continent in four years), pressing the flesh and committing Chinese know-how and money for major infrastructure projects in impoverished countries like Angola and Zambia.

In Sudan, China has taken plenty of flak for its support of the ruling regime in Khartoum despite continuing acts of genocide in southwestern Darfur. Beijing must be wearing a flak jacket, though, because national operator PetroChina keeps on tapping Sudanese fossil fuels while it builds the country's first escalators and shopping malls along the Nile River.

And the company's stock price hasn't suffered, since investors like Warren Buffett and major institutional funds still see its diverse international explorations (not just in Sudan but in Kazakhstan, another new mega-frontier for international oil projects) as profitable. NYSE:PTR has steadily climbed from around $18 per share all the way to over $160 recently. This is what a dragon chart looks like.

Yet this week I see that Yankee Doodle oil companies are still twiddling their thumbs over Libyan oil, even though the same American firms are cautiously staying out of Sudan and carefully negotiating alliances with Central Asian states involved in the Sinocentric Shanghai Cooperation Organization.

The six-country SCO concluded a summit this month with war games and a vow to create an "energy club," which Kazakh President Nursultan Nazarbayev called "a basic element of an Asian energy strategy."

What's the basic element of American energy strategy?

I'm waiting . . .

Still nothin'? Yeah, I can't figure it out either.

If there's one key component to our strategy of tragedy, it seems to be "never miss an opportunity to miss an opportunity."

Early bidding rounds for Libyan oil in 2005 saw French, British, Indonesian, Algerian, Italian and even Canadian companies walk away with concessions in Libya's oil-bearing deserts. It was a veritable United Nations of oil opportunity. But US Big Oil was left out big time as those companies adopted a "wait-and-see" approach.

This month, Libya announced it would soon open bidding for 41 natural gas sectors, potentially worth billions of dollars. No US company has entered a bid, according to Oil and Gas Journal.

My response is a big "Whatever." You know why? Because I know that I don't have to do what Washington says, and neither do you.

Regards,

Sam Hopkins

P.S. - I told my Orbus Investor subscribers last fall about a tiny Canadian company that had the vision to get in on the 2005 bidding rounds in Libya. It's a company so small that many of my Canadian counterparts say "Huh?" when I bring it up.

But Orbus Investor subscribers know the deal. Just check out the blue line in the chart below, compared to the stellar performance of PetroChina I mentioned before:

This stock has surged well over 200% since my initial recommendation, high enough for me to recommend to my subscribers that they sell half and keep the rest on the table. Wise advice, they told me, but I'm going to give you an even better tip: This baby isn't through.

With a handful of drill holes testing deep in a known oil-producing region in Libya, the company already has confirmed oil discoveries in at least three reservoirs. Right now, the market isn't even pricing production, it's pricing exploration potential. I think this stock could double again from a recent pullback, and I want you to get in.

This is the beauty of international investment. Know no borders, no bounds, and don't accept meager returns just because they're down the street. I show my Orbus Investor subscribers how to play progress from Tripoli to Tokyo right from the comfort of home, and crush Wall Street in the meantime.

At this moment, the Orbus Investor premium portfolio has gained over four times what the S&P 500 has done this year, even with Wednesday's recovery. Don't wait another moment to get in and pad your portfolio against a wobbly and debt-ridden American market.

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Sam, you're wrong. US companies weren't exactly twiddling their thumbs in Libya's first oil round. Occidental Petroleum, Chevron, Amerada Hess and many other US companies predominated there, winning 11 out of 15 blocks. As for the gas round, several US companies, including Chevron, ExxonMobil and Marathon, have qualified. As a reporter for 10 years for one of the world's premiere energy news services, my experience is that oil companies go where they can make money -- period. In fact, prior to the bidding rounds, some people wondered whether the government's take was of around 90% would be too high. But based on the US turnout in Libya's oil and gas bidding so far, I'd say US companies are putting their money where their mouth is.

- Starr Spencer