Talisman divestment campaign unpopular - Survey finds 90% favour Sudan stake
The Globe & Mail, Friday, January 7
STEVEN CHASE, Alberta Bureau
Calgary -- A divestment campaign against Talisman Energy Inc. for its
controversial Sudan operations doesn't appear to be finding many takers,
suggests a new, informal survey by a leading Canadian oil analyst.
Martin Molyneaux of FirstEnergy Capital Corp. in Calgary says he's
talked to between 30 and 40 of Talisman's institutional investors since
mid-November and has found that more than 90 per cent want the
company to keep its Sudan operations.
"We've surveyed a whole raft of institutions and the vast majority we've
talked to, in excess of 90 per cent, want Talisman to keep Sudan."
Mr. Molyneaux's comments come as more reports trickle in about sales
and potential sales of Talisman stock by large institutional investors.
Another major U.S. investment fund has sold its stake in Talisman
because of its lagging performance and one of the company's biggest
American investors has responded to a call for divestment by
investigating controversy over Talisman's $735-million Sudan operations.
Mr. Molyneaux has more than once been ranked the top oil equity
analyst in Canada by consulting firm Brendan Wood International,
following surveys of institutional investors on criteria such as credibility.
His findings suggest frequent reports of sales of Talisman stock by major
investors don't represent a broad groundswell against the firm and its
operations in war-torn Sudan, which has become an international human
rights pariah after allegations of slavery, genocide and forced clearing of
settlements in the country.
Talisman, which has a 25-per-cent stake in the oil project, is the target of
harsh criticism by church and human rights groups who say civilians have
been forced from their lands by oil development, and that oil money
enables the Khartoum regime to continue Africa's bloodiest and longest
civil war. The groups want investors to sell Talisman shares, and they
urge U.S. authorities to have the company's New York Stock Exchange
listing lifted.
But Mr. Molyneaux said those who make investment decisions think
Sudan is better off because of the Canadian company's presence.
"A lot of these investors think it's better for us, from a political point of
view, for us to be there than not there."
He pointed to reports in The Globe and Mail yesterday that both
Talisman and Ottawa are protesting the military use of civilian airfields in
Sudan as evidence Canada can exert influence in the African country.
"I think most people think, kind of like I do, that what you do is take a
pro-active approach and keep the assets [instead of taking] a reactive
approach and wash[ing] my hands of Sudan."
The California Public Employees Retirement System (Calpers) was one
of the major investment funds to recently pull out of Talisman. Calpers
told a legislative committee in the state Wednesday that external
investment managers cleaned out its position in Talisman at the end of
1999.
Spokeswoman Pat Macht said the decision was purely financial. "It
probably had something to do with the fact their stock price performance
of late hasn't been that good."
Talisman's share price has lagged its peers during the oil recovery of
1999, suffering what analysts such as Mr. Molyneaux estimate is a $4 to
$5 discount because of controversy over its Sudan operations, which
have come under increasing scrutiny from the Canadian and U.S. federal
governments.
Whether the share discount will be lifted depends largely on the contents
of a report by a Canadian fact-finding mission to Sudan, to be released
later this month. |
