Lest anyone think that only Talisman Energy is being targeted for their complicity in the oil-driven destruction of Sudan, see the attached article from the prestigious Far Eastern Economic Review, commenting on the potent divestment campaign that has been launched against Chinese participation in the Greater Nile project.
Eric Reeves [January 5, 2001]
Northampton, MA 01063
Among other things, the Far Eastern Economic Review describes the sort of coalition-building that is making its way north to Canada and should soon be bringing even more pressure to bear on Talisman share price. For now, American efforts—in addition to pushing forward with the Talisman divestment campaign—are taking dead-aim at PetroChina, a virtually wholly owned and controlled subsidiary of China National Petroleum Corp (40% partner in the Greater Nile project). And the forces being deployed are formidable: organized labor (including the AFL-CIO), Friends of the Earth, Freedom House (Center for Religious Freedom), Tibet activists, Sudan activists, and many others.
Oil development in Sudan is simply morally unacceptable in the midst of ongoing and immensely destructive civil war; and if there is enough capital market pain generated out of these moral convictions, even the Chinese will be moved.
The excruciating capital market experience of Talisman Energy can be our guide here: despite a massive share buy-back scheme and a 400% increase in net income for 2000, the stock is barely above where it was at the outset of the divestment campaign in late summer 1999. Just as telling, despite record-breaking cash flow numbers, the cash flow per share multiple is still under 3 times—dismal!
Expect to see soon a good deal more news coverage of the role of capital market strategies in forcing a halt to oil development in war-torn Sudan.
Far Eastern Economic Review
Issue Cover dated January 11, 2001
“Dump PetroChina Stock”urge NGOs [nongovernmental organizations]
A broad coalition of American pressure groups and non-governmental organizations is pushing U.S. financial institutions to dump their stock in PetroChina because of African investments held by its state-owned parent company, China National Petroleum Corp.
The roughly two dozen independent organizations — which include such diverse groups as the powerful AFL-CIO trade union, the International Campaign for Tibet, the Centre for Religious Freedom and Friends of the Earth — are particularly concerned about CNPC’s interests in the Sudan, where the Muslim government is accused of genocide against the Christian minority in the south. CNPC, China’s largest state-owned enterprise, is a leading partner in Sudan’s increasingly productive oil fields.
The NGOs have pressed for socially responsible investing for some time, but this campaign marks one of the first times that American investors have been called on to consider human rights, religious freedom and national security issues. The 40 financial institutions that were lobbied to get rid of their stocks in PetroChina, which was listed in New York last April, include Citigroup, Merrill Lynch, Mellon Bank, Templeton Funds and Putnam Funds.