Buckee digs in - Embattled CEO defends Sudan project
Calgary Sun, May 2
By Todd Nogier, Business Editor
Talisman Energy Inc.'s boss says he has many offers from oil barons wanting to buy the Calgary company's holdings in war-torn Sudan.
But CEO Jim Buckee told a roomful of his most loyal shareholders and staunchest critics at the company's annual general meeting yesterday that he won't turn his back on the country and sell to an operator that wouldn't work as hard as Talisman has at trying to improve the lives of Sudanese caught in the middle of a bloody civil war.
Church groups angry
"There are lots of (potential) buyers. I've got offers on my desk," said Buckee.
"But we're bringing Canadians and Canadian values to an area that needs it. We are moving behaviour, we are moving opinion by our presence and our assistance in health, safety, the environment and human rights."
During the meeting, Buckee was heckled, interrupted and lambasted by angry church groups and Sudanese nationals imploring Talisman to abandon its oil project in the African country. Talisman has faced fierce criticism from social activists since it took a 25% interest in the Sudan-based Greater Nile Petroleum Operating Co. in 1998.
Critics say the oil industry has led to the forced displacement of locals from oil-producing areas and is funding an ongoing war.
Talisman last month released its "corporate social responsibility report" outlining its involvement in the construction of hospitals, the procurement of clean drinking water and im-provements to education in the countryside.
And while Buckee says Talisman is now winning the war of words over the controversial project, analysts have watched protests pick up in the last two years and are beginning to muse about whether remaining in Sudan is worth it.
"It's something, personally, that I'm struggling with," said Brian Prokop, an oil and gas analyst with Peters & Co. in Calgary.
He notes Sudan adds tremendously to Talisman's bottom line, but the controversy has chased investors away, holding back the company's share price in the process. Talisman's shares closed at $61.84 in Toronto trading yesterday -- a discount from the $85 range Prokop says the stock would be trading without Sudan.
Cash flow to hit $3B
"If they sold Sudan and their shares rose to $85, they could use that extra cash to go out and buy something else without all the baggage," he said.
It's not that Talisman is desperate for cash. Its core production areas, including Western Canada, the North Sea and Indonesia, generated record profits in 2000 and so far this year.
Soaring commodity prices contributed to earnings of $346 million and cash flow of $764 million in the first quarter of 2001.
Buckee expects cash flow to reach $3 billion this year.
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