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Gold/Mining/Energy : TLM.TSE Talisman Energy -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (578)	11/18/1999 10:39:00 PM
From: Tomas	Read Replies (1) \| Respond to of 1713

Talisman sitting tight with Sudan project - Canadian Press, Nov.18 TORONTO (CP) -- Talisman Energy Inc., one of Canada's largest oil and gas producers, plans to hold on to its oilfield investment in war-torn Sudan despite rising national, international and shareholder criticism about its involvement in the African project. "If Talisman were to pull out -- then what," said David Mann, Talisman's manager of investor relations. "People think that somehow the oil would stop flowing, that the project will shut down, but it will not. Somebody would step in and fill the role there." Any company taking over Talisman's stake in the Greater Nile oilfield and pipeline might not have a concerned national government behind it, Mann said. "We see our involvement there as a good thing," he said. "Talisman's involvement may at least in part be responsible for the Canadian government's interest and certainly media interest." "I suspect Sudan wouldn't be all over the front pages (of the newspapers) in Canada if it weren't for Talisman." Talisman holds a one-quarter stake in the Nile project, which includes a 1,610-kilometre pipeline from the oil fields of south-central Sudan to the Red Sea. The pipeline, completed this year, has allowed Sudan to begin commercial exploitation of long-untapped oil reserves. Sudan also is the scene of a 16-year-old civil war that has left nearly two million people dead, mostly southerners who died in a war-induced famine. Oil areas have been scenes of many battles throughout the year. Rebels have fought government forces and former rebels allied with the government also have been fighting government militias for the right to protect the pipeline from rebel attacks. Critics say Talisman's investment in the country's oil development has helped finance the Sudanese government's military crackdown. Canada's Ministry of Foreign Affairs hopes to send an envoy and expert in African affairs, John Harker, to Sudan in the next few days. Ottawa has said it would send monitors to investigate allegations that oil revenue from the project is helping the Sudanese government with the war. There have also been reports linking private Canadian interests to human rights violations in Sudan. "Ultimately we think truth will prevail and that this oilfield development will be seen to be a good thing in a very poor country and ultimately, similar to areas like Oman and Yemen, will accelerate the peace process and not detract from it," Mann said. However, Talisman has been barraged by media attention along with questions from the U.S. and Canadian governments and some major shareholders about its investment in the war-torn country. The head of the Ontario Teachers Federation, Barbara Sargent, has said teachers are going to pressure the managers of their giant pension fund to sell its 4.5 million Talisman shares. Lee Fullerton, spokesperson for the Ontario Teachers Pension Plan, said the fund hasn't spoken with the teachers about their concerns and, before any decisions are made, would like to first hear the view of the Canadian government's envoy to Sudan. While governments can pressure Talisman to sell its investment, Canada's foreign policy encourages economic development in war-torn countries while political pressure is applied to reach peaceful settlements. The Sudanese project employs 2,000 local residents along with more than 100 Canadian Talisman employees who are training Sudanese workers to eventually replace them, Mann said. Meanwhile, shareholders or major investment funds could have more of an effect on the company's decisions if they choose to sell their Talisman shares. And some funds may be under political pressure to do just that, said Paul Beique, an analyst with Dundee Securities in Calgary. "That would affect the stock price," he said, and may make the company re-evaluate its position. The uncertainty in Sudan could also discourage some from investing in the company at this point. Talisman's shares fell $1 to close at $40 on the Toronto Stock Exchange on Thursday, on a trading volume of 1.1 million shares. But shareholder pressure might not convince Talisman to sell the Sudan project, Beique said. "There's nobody who has a big enough position to really force this on Talisman," he said. One analyst, who asked not be named, said "there's a low chance" the company would decide to sell its Sudan investment right now when world oil prices are so high. "A decision will not be made in the near term, a decision will be made probably late in the first quarter at the earliest, maybe the second quarter . . ." when new drilling results are completed, the analyst said. "Talisman's involvement has opened up the eyes of the West," to the current political situation in the country, said Henry Cohen, an analyst with CS First Boston. If the company left the area, the interest of the West in its future might wane, he suggested. canoe.ca