Greenspan voices strong opposition to Sudan bill
Boost for Talisman: Statute could be 'downright harmful' to U.S., senators told
Financial Post, July 25
Claudia Cattaneo, Calgary Bureau Chief
Alan Greenspan said law could "undermine financial capacity"
CALGARY - Pressure on Talisman Energy Inc. to divest its Sudan operations eased yesterday, as Alan Greenspan, chairman of the U.S. Federal Reserve, denounced measures proposed by U.S. legislators that would bar companies active in the war-torn African country from listing on U.S. stock exchanges.
"I find the motive of the legislation, I think, obvious and commendable, but I don't think the implications of this particular type of statute is useful to the United States, and in fact I think it is downright harmful," Mr. Greenspan said in response to questions from the Senate Banking Committee, where he presented his semi-annual report on monetary policy.
"The clear outcome of such a law would effectively be to move financing from New York to London. There's even some concern within the banking system that in order to comply with such a law, the banks would have to make certain their customers aren't in violation of the statute, which is very difficult to do.
"And since such a crucial part of the effectiveness of the American economy is a very sophisticated capital market and its financial infrastructure, I am most concerned that if we move in directions which undermine our financial capacity we are undermining the potential long-term growth of the American economy."
Calgary-based Talisman said it would not comment on proposed U.S. legislation.
Scott Inglis, research director at FirstEnergy Capital Corp., said Mr. Greenspan's view is helpful to Talisman and reduces selling pressure on its stock by U.S. investors.
"Every amount of support that they (Talisman) get from senior people is positive," Mr. Inglis said.
It also reflects concerns in the U.S. financial community that such a ban -- along with U.S. sanctions against countries such as Libya, Iraq and Iran -- are making it harder for U.S. exchanges to be the international markets they are striving to be, he said.
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.
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