Pressure over Sudan dying down: Talisman
Globe and Mail, May 2
By LILY NGUYEN
Calgary — Talisman Energy Inc. CEO Jim Buckee said pressure is dying down over the company's involvement in Sudan, even as protesters besieged the company's annual meeting Tuesday.
"I would say slowly but surely, people are coming around to our point of view that, yes, peace is needed, yes, it's been a long tragedy, but Talisman withdrawing isn't going to help anything," Mr. Buckee said at a press conference following the annual meeting, which stretched to two hours as members of the Sudanese community and human rights groups lined up at company-supplied microphones to express their anger at the company.
Outside the downtown Calgary hotel where the meeting was held, more than 200 protesters brandished signs that read "Human Rights No Price to Pay for Oil" and chanted "Shame, shame, Talisman, out, out, from Sudan." Human rights group Amnesty International also released a statement calling on Talisman to do more to safeguard human rights in Sudan.
"From what we've seen and read, our perspective that we're helping people, I think, is gaining currency," Mr. Buckee said, citing the stances of the Canadian government and governments in Europe which have advocated policies of "constructive engagement" when it comes to doing business in Sudan.
For the third year in a row, Talisman squared off against its critics, who say the Calgary energy company's oil project in Sudan is helping to prolong a bloody civil war by providing royalty revenue — $306-million last year — to the Khartoum-based government. They want the company to withdraw from the region, a core area of Talisman operations that makes up less than 10 per cent of total revenue.
Talisman insists that it does more good than harm in the area, providing jobs, benefits, education, and a constructive influence on the Sudanese government.
"We fail to see how things could be better if Talisman withdrew," Mr. Buckee replied to critics.
The company issued strong first-quarter results and announced a new common share dividend of 60 cents per year to coincide with the meeting.
Profit for the period ended March 31 was $345-million or $2.46 per share, a 68 per cent jump on the $206-million or $1.44 per share recorded a year ago, thanks to strong natural gas prices.
Cash flow also increased to $764-million or $5.54 per share, from $571-million or $4.10 per share a year ago. The company predicted staggering cash flow of about $3-billion for the year, and set its capital spending budget at $2.8-billion.
Production declined slightly, largely a result of both planned and unplanned shutdowns of facilities.
Mr. Buckee said the company, one of the last of the majors to declare a common share dividend, decided on the 60-cent annual payout because it is confident about the company's future earning potential. Both institutional and retail shareholders have also been clamouring for a dividend, he said.
Mr. Buckee played down the existence of a so-called "Sudan discount" on the company stock, which lost 76 cents to close at $61.84 Tuesday on the Toronto Stock Exchange.
"It's very hard to say that we're at this multiple because of Sudan," he said. But Martin Molyneaux, research director of Calgary investment firm FirstEnergy Capital Corp., estimated company shares could be roughly $5 higher if not for pressure over its presence in Sudan.
However, he added the discount is gradually disappearing as the company posts successively strong quarters.
Mr. Buckee rejected any notion of the company withdrawing from Sudan as a result of pressure from human rights groups.
"I don't think they're right, I think we're right. We send Canadians, Canadian values down into this area." He added that the Sudan oil project, which saw the biggest production increase of all Talisman's operating areas at 19 per cent, is a good one for the company.
But protesters said they're not going away either.
"We will fight it until the end," vowed Abraham Deng, a 38-year-old protester who came to Canada two years ago from South Sudan, and came from Winnipeg to make his point outside Talisman's meeting.
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