We're pulling a reverse Marty McFly. In the classic 1985 movie Back to the Future, our young protagonist zooms off into the past while escaping from a van full of Libyan terrorists. Now, the world's energy consumers are zooming into the future - and straight toward the Libyans for their oil wealth.

Just check the news: the Libyan National Oil Corporation just auctioned off exploration blocks in the country's Ghadames and Sirte Basins to national and privately-run oil and gas companies:

Petro-Canada, Gazprom, Algeria's Sonatrach, Royal Dutch Shell... The list of firms knocking on Col. Muammar Qaddafi's door reads like who's who of heavy hitters in the world's resource market.

Billions are flowing into Tripoli, the capital of this OPEC member with around 6 million inhabitants and the simplest flag you'll ever see:

And along with oil, billions of dollars in sovereign wealth are about to start flowing out of Libya as well.

Yesterday, December 11, Libya's Prime Minister (Qaddafi is still the Leader and Guide of the Revolution, since 1969) Baghdadi Mahmudi told Bloomberg news that Libya is set to sling $255 billion in petrodollars around the world.

$155 billion of that would be spent in Libya on projects related to housing, energy, and telecoms reminiscent of the days when Libya was a primary state sponsor of terror.

However, Mahmudi added, "We are now preparing to invest more than $100 billion outside Libya, in different fields."

This puts Libya in league with petrocracies like Qatar, Dubai, and Abu Dhabi, all of which have debuted their own sovereign wealth funds with a bang in recent months. Even China, awash with cash (most of it in dollars), is throwing some $200 billion out of its $1.4 trillion coffers into foreign and local investments as the greenback itself dwindles in value.

Libya, with Africa's largest oil reserves, is in the unique position of a long-dormant giant. For nearly twenty years, Libya's oil and gas sat largely untouched as a result of western governments' bans on doing business with a government behind several terrorist incidents in the 1980s. With Nigeria's continent-leading oil production in jeopardy over abductions and repeated pipeline attacks and siphoning, Libya is the new hope for African oil.

But in May, 2006, Condoleezza Rice declared that the United States would restore full diplomatic relations with Libya. A US embassy will be established in Tripoli, and the country known to its people as the Jamahiriya ("State of the Masses") will be removed from the state department's list of state sponsors of terror.

That roster has put Libya in bad company, including North Korea, Sudan, Syria, Cuba, and of course Iran.

So why the change of heart? Libya was still held on this list despite disavowing terrorism and its pursuit of weapons of mass destruction in 2003. U.N. Sanctions were also lifted that year.

The Bush administration touted Col. Qaddafi's softening stance to successful political and economic pressure and the example set by military action against Iraq.

The Libyan government has also arrested and extradited its nationals involved in the 1988 Lockerbie bombing of Pan Am flight 103 and a similar attack on a French airliner in 1989, while publicly apologizing for its responsibility in the incidents and paying almost $3 billion to victims' families.

Libyan Sovereign Wealth in Action

Now Qaddafi is wheeling and dealing, especially this week in France where he addressed French legislators on Tuesday and inking contracts for 21 Airbus planes, weapons, and even nuclear power technology.

Yep, you read that right. Libya has been extolled by the Bush Administration as an example of a reformed terrorist state, handily bringing 39 billion barrels of proven oil reserves in from the cold with its political compliance.

Could this be achieved in Iran? Well, the revolutionary leader is still in power in Libya. Same cloak, same sunglasses, but with a more pan-African and less Arab nationalist approach. The current drum-beaters in Washington do not seem ready to abide anything less than complete regime change in Tehran.

Sarkozy's invitation of Qaddafi to France was the first time a western leader has offered an official visit in nearly two decades.

"Libya has become a client like any other," presidential spokesman David Martinon said on television about the nearly $15 billion in deals.

Now, Libya may become a patron, taking notes on the Abu Dhabi Investment Authority's $7.5 billion stake in Citigroup (NYSE:C) and funding of chipmaker Advanced Micro Devices (NYSE:AMD), Dubai's successful acquisition of a chunk of NASDAQ's ownership and casino operator MGM Mirage (NYSE:MGM), and a slew of potential deals involving sovereign wealth funds around the world.

This chart from Reuters shows the steep steps up in recent years by sovereign wealth funds and their foreign investments:

Also look for Libya to join the World Trade Organization in the coming years, as it has already started application proceedings to join that consummate capitalist club.

World oil supplies are squeezed, prices are up, and a new day is dawning in North Africa's resource powerhouse. I'll keep you up to date with the latest.

Regards,

Sam Hopkins

P.S. - I've been on this story for nearly two years now, combining geopolitics and economics to deliver a major gain to my Orbus Investor subscribers. It's a small company that beat all the Big Oil players to Libya, and it's already delivered gains of over 270% since my "buy" recommendation last autumn. Right now it's in a pullback stage, but the positive news keeps coming.

To learn more, click here:http://www.angelnexus.com/o/web/3289