Oklahoma City-based Bronco Drilling Co. is making its first international foray, and the destination is Moammar Gadhafi’s Libya.

The deal, announced this week, is another sign that U.S. investment is broadening in a nation once considered a pariah by the United States.

Multinationals rushed into oil-rich Libya when President Bush lifted restrictions that had barred oil companies from doing business there for nearly two decades. Companies like Bronco, which operates its drilling rigs in Oklahoma, Kansas, Texas, Colorado and North Dakota, now appear ready to take a chance as well.

Hatem Fakhr, CEO of the Libyan company Challenger Ltd., said a deal with Bronco had been in the works for “a number of months.”

Bronco CEO Frank Harrison said the company wanted to enter the Middle East market and believes Libya — despite its one-time enmity with the U.S. — has great potential.

“The relationship was damaged over the years, and we’ll see if it will be repaired,” Harrison said Thursday in Cairo. “We think it will.”

Shares of Bronco rose 65 cents, or 4.5 percent, closing Friday at $15.17.

The subscription agreement will give Bronco Drilling a 25 percent equity interest in Challenger, whose headquarters are in Cairo but which operates mainly in neighboring Libya.

As part of the agreement, signed late Thursday in the Egyptian capital, Bronco Drilling will provide several rigs and training expertise to Challenger, which currently operates 23 rigs in Libya.

Fakhr said the agreement was beneficial to both — providing Bronco Drilling with a “new edge” as it ventures outside the U.S., while also “putting Challenger in a position in which it will benefit from advanced standards and policies, for example in environment protection.”

Major international oil companies such as San Ramon, Calif.-based Chevron Corp. wasted no time signing exploration deals when restrictions were lifted in 2004.

Bronco officials acknowledge they may be ahead of most midsize companies in their investment.

Libya provides tremendous opportunity for growth, especially with oil trading at nearly $100 a barrel.

Over the next six years, Libya would like to see oil production capacity increase by 40 percent from 1.8 million barrels per day to 3 million by 2013.

Challenger also hopes its deal with Bronco will help boost standards in Libya.

“We saw an opportunity for an American company to invest in a company in Libya,” said Yalmez Tatanaki, director of Challenger. “We have a lot to learn from them.”

source news : tulsaworld.com