The many long-term threats to Talisman Energy share price:
A bullet point review of recently distributed analyses—
Eric Reeves [March 2, 2000]
Smith College firstname.lastname@example.org
Northampton, MA 01063
***CONNECTIONS TO CHINA NATIONAL PETROLEUM CORP. (PETROCHINA)—this story has hit with explosive force in both the financial press and, increasingly, the mainstream press. Talisman will be unable to detach itself from all the intensely negative fallout generated by this impending IPO flop; indeed, Talisman is now typically cited in discussions of the PetroChina controversy. The Wall Street Journal is covering the story relentlessly. And those in the US Congress with oversight responsibility for the SEC and NYSE have made known their extreme displeasure with the prospectus brought by Goldman Sachs. Capital market sanctions haven’t had such a clear chance of being imposed since 1995 and Iran-Libya Sanctions Act.
***AFL-CIO, THE BEHEMOTH OF THE AMERICAN LABOR MOVEMENT, IS FLEXING ITS CAPITAL MARKET MUSCLE—
This, in an American election year—with candidate Al Gore utterly dependent on big labor for a November victory—insures that the AFL-CIO will be taken very seriously in its concerns about American capital market participation. Yesterday’s remarkable press release (reported in today’s Wall Street Journal) seems a natural antecedent to their joining the divestment campaign against Talisman.
***CANADIAN OUTRAGE AND GROWING RESOLVE—Nothing could be clearer from conversations with my extensive contacts in Canada that, at the grass-roots level, there is shame and outrage over Talisman’s complicity in Sudan’s agony. This—I was told today (Mar 2) by my two best, most informed contacts from the Canadian NGO world—has led to “exponential growth” in divestment commitments, increasingly on university campuses.
***BOMBINGS OF SCHOOLS AND HOSPITALS—Just today (Mar 2), news arrived that the Government of Sudan targeted the Samaritan’s Purse Hospital in Lui (Western Equatoria). Three passes were made by the GOS Antonov bomber, as it dropped twelve anti-personnel bombs. The bombs hit the tuberculosis clinic, the Lui marketplace, and an NGO compound—killing and critically wounding dozens of human beings. This is Talisman’s partner—and the “optics” don’t get any worse.
***SANCTIONS THREATS—One way of thinking about the divestment campaign, now rapidly taking on a much more “Canadian inflection,” is that it is but one of FOUR “sanctions” possibilities confronting Talisman. It might be described as a “grass-roots capital market sanctions campaign.” But as Lloyd Axworthy made clear in a letter to the Toronto Star (Feb 28), “The imposition of sanctions is not, nor has it ever been off the table.” And the US State Dept is ACTIVELY considering a proposal to extend sanctions to partner of the Greater Nile project. And, fourthly, Axworthy has in the past, and may again in the very near future, seen chairmanship of the UN Security Council as the opportunity to impose sanctions that were stymied by other ministries in Ottawa.
***DISAFFECTION ON THE PART OF OIL INDUSTRY ANALYSTS:
We saw only the tip of the iceberg with this snippet from a Financial Post piece (Feb 24): “It’s an issue. Everybody has read about it … and they have to make a decision: ‘At what point do we want to continue to be involved in Talisman?'” said Gord Currie, an oil and gas analyst with Canaccord Capital Corp. who downgraded the stock to “buy” from “strong buy.” There are plenty more defections where that came from!
***COMPLETE LACK OF MORAL COVER FOR TALISMAN FROM NGO COMMUNITY—As has recently been reported [CNW (Feb 25)], a group of NGOs, originally scheduled to work with Talisman on human rights protections, has abandoned the effort. Moreover, the group’s leader predicted there will be no takers for the company’s offer to work with NGO partners in the Sudan oil field. Gerry Barr, of the Steelworkers Humanity Fund, says the human rights issue has to be resolved before any credible NGOs would be willing to associate themselves with the Calgary-based oil firm. “Talisman Energy doesn’t get it”, said Barr. “Talisman is the subject of monitoring, not the monitoring agent.” Talisman has no friends, no friends whatsoever—except Hill & Knowlton and those they can influence politically. Such radical exposure to continuing assault on moral and humanitarian grounds makes Talisman a sitting duck for press reports—like those detailing the bombings of schools and hospitals.
To be continued—-