Theory. We won't hear anything regarding TLM and OIL(if that is in the works) until this is cleared up. Complete post as stories are not kept online long.
canoe.com
Canadian oilpatch finds rewards and risks
abroad
Money's Oil and Gas News
CALGARY (CP) -- Talisman Energy Inc. (TLM-T) is finding the ethics
of working in war-torn Sudan far more troublesome than building and
operating a massive oil project in a harsh climate and rugged
landscape.
Talisman, a 25 per cent owner of the Sudanese development, along
with Chinese and Malaysian investors, has endured intensified
criticism since U.S. State Secretary Madeleine Albright attacked the
Calgary-based company's presence in Sudan a month ago.
Human-rights and church groups say Talisman's oil operations help
fund the government's war against a Christian minority in southern
Sudan. They want Ottawa to force Talisman to sell its stake.
That could send a chill through Canada's increasingly world-oriented
oil industry.
Martin Molyneux, an analyst at First Energy Capital Corp., warns
against political interference.
"We have Canadian producers in 60 oil regions in the world, and oil
tends to be in politically unstable countries," said Molyneux.
"This would not be a good message to the Canadian producing
community, if Ottawa were to do something."
Talisman's $735-million stake in the project includes a 1,610-kilometre
pipeline from the oilfields of south-central Sudan to the Red Sea. The
pipeline has allowed Sudan to begin commercial exploitation of
long-untapped oil reserves.
Sudan is also the scene of a 16-year-old civil war that has left nearly
two million people dead, mostly southerners who died in a
war-induced famine.
As opportunities in the Canadian oilpatch diminish, Calgary
companies -- Petro-Canada (PCA-T) , Alberta Energy Co. (AEC-T) and
Canadian Occidental (CXY-T) among them -- are looking to expand
their international plays.
Loren Falkenberg, an associate professor of business ethics at the
University of Calgary, said it's laudable that Canadian companies want
to grow internationally but they must be prepared for negative
publicity.
"In the early 1970s the responsibility of business was to make a
profit," she said. "Well, there are many people now saying the
responsibility is to make a profit, but in a socially responsible
manner."
Alberta Energy has avoided major problems but in September a
contractor working for the company in Ecuador had seven employees
kidnapped, likely by anti-government guerrillas.
Social unrest has forced countries like Colombia to introduce more
lucrative investment schemes for foreign companies.
Ecopetrol, Colombia's national oil company, held investment
meetings in Calgary, London and New York this fall hoping to spark
new interest in its oilfields.
"It's no doubt that the public order situation is a consideration,"
observed Ecopetrol spokesman Robert Stewart.
Petro-Canada hopes to expand its operations in Algeria, a country
racked by an uprising. The company understands the risk, said
Petro-Canada spokesman Rob Andras.
"Clearly, our first obligation to shareholders is to do business,"
Andras said. "But on the other hand, if the potential involvement
raises real questions with respect to our international code of conduct
or our corporate reputation, that's something we'd have to take clear
account of."
Falkenberg wonders whether companies are as vigilant in their risk
assessment as they claim.
"I think they see 800 million barrels of recoverable oil and say, 'We're
strong enough; we'll manage our image and we won't be bothered,'
instead of saying, 'Wait a minute, where could all of the effects come
in?'"
Kevin Finn of Canadian Occidental said his company concluded it
had to adopt a different approach when operating abroad.
"One of the things we've recognized is that oil and gas companies
have not necessarily had the best track record in how they have dealt
with ethics," Finn said.
"We're extremely transparent, straight up and ethical. That's what
distinguishes us -- which is a rather sad statement, but true."
CanOxy and a number of other Canadian companies developed the
International Code of Ethics for Canadian Business.
"The code has made us more accountable to ourselves and
outsiders," said Finn. "But your actions speak louder than your
words. If you don't live by the code, you may has well not have one."
Since arriving 12 years ago in Yemen -- where it now produces
208,000 barrels of oil a day -- CanOxy has been working to bring
running water and electricity to desert villages.
Talisman spokesman David Mann, meanwhile, says his company has
been the victim of misinformation.
Mann pointed to Talisman's commitment to build roads, drill water
wells and establish a hospital.
"Ultimately, we believe Sudan is a highly ethical investment that will
benefit the people living in that country, and also it presents a good
return to our shareholders."
Canada has sent special envoy John Harker to Sudan to assess the
situation. Foreign Affairs Minister Lloyd Axworthy has also invited
the warring sides to Ottawa in an attempt at peace talks.
The acid test will come when Sudan's government decides how to
spend its new-found revenue, said First Energy Capital's Molyneux.
"They'll be getting $500 million a year," he said. "If they go and
spend it on tanks, that's not a great sign because that means there'll
be trouble down the road." |
