Canada Calling: Canada's Talisman Energy Company's Sudan Operations Targeted by Boston "Anti-Slavery Group"

Article excerpt

CANADA CALLING: Canada's Talisman Energy Company's Sudan Operations Targeted by Boston "Anti-Slavery Group"

"This is a great day for all of the people of Sudan," said Dr. Jim Buckee in announcing the first loading of oil for export by Talisman Energy Inc. Dr. Buckee, president and chief executive officer of Talisman Energy, also said, "I would like to thank and congratulate Talisman's employees, our partners and the government for their tremendous efforts toward achieving this milestone."

It may be great for the people of Sudan, but the same can't be said for the company. The Calgary-based corporation has faced problems within the Sudan from the beginning due to civil strife there. It may now have to deal with external pressures as well. The Boston-based American Anti-Slavery Group has launched an international campaign to boycott the company. It is calling on institutional investors -- pension and mutual fund companies -- to divest from the exploration company.

The group alleges that the Sudanese government "is encouraging the slave trade as part of its decade-long `holy war.'" In a letter written to the National Post, Charles Jacobs, president of the Boston group, charges that the Canadian company is assisting this slave trade.

Calgary's Talisman Energy is the third largest independent oil producer in the world. The company purchased a 25 percent stake in a Chinese-Malaysian-Sudanese consortium drilling in southern Sudan. The consortium now has established a refinery and has started shipping oil through a 1,500-kilometer pipeline to the north of the country. On Aug. 30, the corporation loaded its first cargo of 600,000 barrels of Nile Blend crude for export.

The anti-slavery group has sent letters to a number of mutual fund companies in the U.S. and Canada that have investments in Talisman. The allegation is that the government is using the profits from this business to persecute southern Sudanis. Jacobs bases his allegation on an alleged April 30 statement attributed to the head of Sudan's National Islamic Front that the Sudan would use its new riches to build weapons factories.

In fact, according to an Associated Press report, the company has built a 60-bed hospital, as well as roads and water wells, and the government has pledged to build schools and hospitals both in the north and the south with its share of the profits.

The Boston group's efforts appear to be focused on Canada for two reasons. First, Talisman Energy Inc. is the largest independent Canadian oil and gas producer. Second, one of the largest investors in the corporation is the Ontario Teachers' Pension Fund, which holds 4.5 million shares worth approximately $122.4 million.

The company has operations in Canada, the North Sea, Indonesia and Sudan. Talisman also is conducting exploration in Algeria and Trinidad. Its shares are listed on the Toronto and Montreal stock exchanges in Canada and the New York Stock Exchange in the United States under the symbol TLM.

A LETTER TO SHAREHOLDERS

The company appears to have anticipated the problem and attempted to address the concerns in a letter to shareholders dated May 27, 1999. In it Dr. Buckee wrote:

"Talisman's investment in Sudan has given rise to comments from a variety of sources both for and against our involvement in the project. To satisfy these points, I have gathered information from many sources, including people with long-term experience in the country and Sudanese nationals. My summary response to these questions is that development in general, and specifically this project, is better than continued stagnation and is welcomed in the area.

"Secondly, Talisman's presence and the attendant Western attention are better than their absence. Thirdly, in addition to the immediate, material benefits of the development, Talisman has had promising discussions with the Canadian government concerning a joint initiative to further the cause of peace and progress. …