U.S. human rights legislation lessens pressure on Talisman
Firm active in Sudan: Bill would not ban company from U.S. capital markets
Financial Post, July 14, with files from Bloomberg News
Claudia Cattaneo
CALGARY - Human rights legislation approved yesterday by a U.S. Senate panel was seen as taking some of the heat off Talisman Energy Inc. to sell its Sudan interests.
The Senate version of a bill approved by the Foreign Relations Committee Thursday evening would not ban oil companies operating in the war-torn African country from U.S. capital markets.
A tougher U.S. House version, approved a month ago by a 422-2 vote, proposes to ban oil companies such as Talisman that operate in Sudan from selling shares or bonds in the United States, or listing their securities in U.S. markets.
Talisman's stock price, which lost 13.3% in the past six weeks on concern the U.S. Congress may force it to divest, bounced back 75¢ yesterday to close at $55.40.
"If that is not going to be an issue, it eases the pressure vis-a-vis Sudan," said Gord Currie, an analyst at Canaccord Capital Corp. "It's not to say that it will go away. It will never go away. But at least it's not right at the forefront."
The Senate's removal of the restriction "would be huge for Talisman," said Brian Prokop, an analyst with investment bank Peters & Co. in Calgary.
Talisman is a part owner of an oil project in Sudan with the national oil companies of China, Malaysia and Sudan. The two other major Western oil companies active in the country are TotalFinaElf SA of France and Lundin Oil AB of Sweden.
Human rights and church organizations say oil is putting more money in the coffers of the Sudanese government, which is waging a civil war against rebels in the South.
David Mann, a spokesman for Talisman, said the company, one of Canada's largest oil and gas producers, is watching developments in the United States but the latest move does not represent a change.
"This is simply proposed legislation. So, there is a Senate version and a House version. We don't know what the outcome is and we have to wait and see," he said.
If the tougher House version is not reflected in the one approved by the Senate, the two bills would have to be somehow merged before being presented to George Bush, the U.S. President, for signing.
The company has said it is prepared to sell its Sudanese holdings if U.S. law changes.
The Bush administration has threatened to veto any legislation that would bar oil companies investing in Sudan from U.S. capital markets.
ccattaneo@nationalpost.com
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