Talisman mulls sale of its Sudan oil properties - Financial Post, Dec.11
Adopts ethics code: 'If it's in the best interests of the shareholder'
Claudia Cattaneo
Financial Post, December 11
CALGARY - Talisman Energy Inc. said yesterday it would
consider selling its controversial oil project in Sudan if it benefits its
shareholders.
"Sudan at current is not for sale, but, at some price at some point in
time, it could be," said David Mann, a company spokesman.
"Ultimately, if it's in the best interest of the shareholder, we will sell
any of our assets. That's always been a principle. We do half a
billion a year or more in asset trades."
But Mr. Mann said the venture received further backing from
Talisman's board of directors this week, as demonstrated by its
adoption yesterday of a code of ethics for Canadian businesses
operating abroad.
Board endorsement of the two-page document was one of five
initiatives requested by Lloyd Axworthy, the Foreign Affairs
Minister, to address domestic and international concerns that
Sudan's oil development was exacerbating a long-running civil war
in the south.
Talisman, Canada's largest oil and gas exploration company, is a
25% partner in the Greater Nile Oil Project with the state oil
companies of China, Malaysia and Sudan. Oil from the project
started flowing this summer, resulting in an estimated $250-million
(US) a year in new cash from oil sales and royalties for the
impoverished African country.
Criticism from the U.S. government, the United Nations and
non-governmental organizations in Canada and the U.S. contributed
to a 15% decline in Talisman's stock since Oct. 26, when the
Canadian government threatened sanctions. The stock closed at
$35 yesterday in Toronto, off 70½.
Sellers included three institutional investors in the U.S. targeted by
human rights organizations in a campaign to drive down the
company's share price until it leaves the country.
Energy analysts have said Talisman could sell the venture, in which it
has invested $800-million, at a potential profit, to European oil
companies wanting to expand in the region.
Development of the code was recently spearheaded by a group of
Canadian businesses operating abroad, including Talisman
competitor Canadian Occidental Petroleum Ltd. The code provides
guidelines on dealing with bribery and corruption, environmental
protection, employee rights and safety.
On human rights, the code advocates to "support and respect the
protection of international human rights within our sphere of
influence," and "not be complicit in human rights abuses."
However, the code also says national governments have the
prerogative to conduct their own political and legal affairs in
accordance with their sovereign rights.
While adoption is voluntary and there's no official mechanism to
ensure compliance, Mr. Mann said board endorsement amounts to
"better enforcement than any external agency could [offer].
Ultimately, we are responsible to the board who are responsible to
shareholders."
As well, the federal government will monitor whether the company
is complying with the code through its missions in Ethiopia and
Kenya, non-governmental organizations operating in the region, and
continuing dialogue, said foreign affairs spokesman Sean Rowan.
Feedback will also be provided by John Harker, the independent
investigator who is currently on a fact-finding mission in the country
to examine whether there's a link between private sector activity and
human rights violations, including slavery. Mr. Harker's report is
expected early next year and could result in economic and trade
restrictions.
"This move by Talisman represents a significant acknowledgement
at the need for Canadian business to take ethical considerations into
account in their overseas operations," Mr. Rowan said.
Mr. Axworthy has also asked the company to use its influence in
persuading the Sudanese government to invite independent experts
to investigate the human rights situation in oil regions, to demonstrate
oil revenues is not being used to buy weapons and to encourage
peace.
Mr. Mann said Talisman is making progress on all those fronts. He
noted the International Monetary Fund is monitoring the use of oil
revenues in the country and recently expressed encouragement at
their inclusion in the government's budget to improve transparency
and demonstrate they will be used to alleviate poverty and
infrastructure development.
canoe.com |
