Ignorance or disingenuousness from Talisman Energy’s Jim Buckee reflected in his perceptions of US policy toward Sudan.
Eric Reeves [March 2, 2001]
Northampton, MA 01063
A news article today from Reuters (attached) has Jim Buckee declaring that though Talisman had recently been considering selling its Sudan stake because of share price distress, “signals from the new U.S. administration about possibly loosening sanctions has given it reason to hang on.”
This is utter rubbish. There have been no such signals from the new US administration about Sudan—none. Indeed, the real issue—both in the Executive Branch and the Congress—is whether sanctions against Sudan will be strengthened, specifically by imposing capital market sanctions against Talisman and other oil companies operating in Sudan. Such sanctions would deny Talisman its listing on the New York Stock Exchange, with catastrophic consequences for share price. Attached is an article from the Financial Times (London) on this very issue. It comments on the version of the Sudan Peace Act that passed at the end of the last Congressional session with the following language:
“[It is the sense of Congress] that the sanctions in subsection (a), and in the President’s Executive Order of November 4, 1997, should be applied to include the sale of stocks in the United States or to any United States person, wherever located, or any other form of financial instruments or derivatives, in support of a commercial, industrial, public utility, or government project or transaction in or with Sudan.”
The implications of this for Talisman, a 25% shareholder in Sudan’s Greater Nile Petroleum Operating Company, should be transparently clear.
Congress especially is geared up to take tough action in confronting the Khartoum regime; support for making Sudan a high-profile foreign policy issue now enjoys extraordinary bipartisan support. Indeed, there is a growing sense—and not only in the US government—that oil development simply must be halted if peace is to come to Sudan. It was with this in mind that the powerfully influential US Commission on International Religious Freedom also strongly urged that capital market sanctions be imposed on Talisman for its role in the oil-driven destruction of Sudan.
Buckee’s ludicrous misreading of the political realities in Washington reflects either the profoundest ignorance, or truly sinister disingenuousness. Shareholders may be forgiven for wondering which is worse.
The Financial Times (London), November 2, 2000
“US legislators want markets to sway Sudan”
By Edward Alden
November 1 2000
The US House of Representatives has quietly passed legislation that aims for the first time to restrict corporate access to US capital markets in order to influence the behaviour of a foreign government.
The House last week approved the Sudan Peace Act, which contains measures that, if enacted, would effectively de-list from the New York Stock Exchange companies doing business with the Sudanese regime.
These include Canada’s Talisman Energy, a former British Petroleum subsidiary that trades about 20 per cent of its shares in the US, and PetroChina, a subsidiary of the Chinese state-owned oil company that listed in New York earlier this year.
Those companies are partners in the development of Sudan’s oil fields. A Canadian government-sponsored investigation earlier this
year said oil revenues were instrumental in sustaining the Khartoum government’s civil war against southern tribes seeking autonomy, which has claimed about 2m lives since 1983.
The House measure will not become law this year, and the Clinton administration has also signalled its opposition to capital markets sanctions. But the vote is a shot across the bows of the next US administration, which is going to face growing congressional pressure to restrict access to US capital markets in pursuit of US
foreign policy goals.
“This is going to be the sanctions wave of the future,” said a congressional aide.
Capital markets sanctions have appeared on a number of pieces of proposed legislation, including a measure defeated this year that would have blocked financing for Chinese companies engaged in weapons proliferation.
Religious and human rights groups also believe that US capital markets may be a critical source of leverage for their campaigns. They pressed many US investment funds not to buy stock in
PetroChina when it raised $2.9bn in a US offering earlier this year.
The US Commission on International Religious Freedom, established by Congress, last week asked the Securities and Exchange Commission to investigate whether another Chinese oil company failed to disclose its involvement in Sudan.
The new pressure paradoxically comes as Congress turns against the use of trade sanctions as a tool of foreign policy, on the grounds that such sanctions often hurt US companies more than foreign countries.
Eric Reeves, a Smith College professor spearheading the campaign to tighten sanctions on Sudan, said that withholding access to US
capital markets would do much less collateral damage to US companies.
With the House passage of the Sudan Peace Act, he said, “The financial world has now been put on notice that capital markets sanctions are a live-wire reality.”
News Article by REUTERS posted on March 02,
2001 at 09:20:56: EST (-5 GMT)
Talisman CEO Says Considered Sale of Sudan Stake
NEW YORK (Reuters) – Talisman Energy Inc. had been considering selling its oil operations in war-torn Sudan amid controversy pressuring its stock price, but signals from the new U.S. administration about possibly loosening sanctions has given it reason to hang on, Talisman’s chief executive said on Thursday.
Talisman CEO Jim Buckee, speaking after a presentation to an energy conference in New York, did not dispute recent speculation that a few select rival oil companies had taken a look at its stake in the Sudan project’s operating consortium. “We were preparing an escape route, or considering where we might go if we had to,”
Buckee said. Last year, Talisman, one of Canada’s biggest oil companies, came under intense fire from the U.S. government and
various human rights groups about its involvement in Sudan, the African nation that has suffered through a civil war for 18 years.
Critics have charged the oil wealth generated by the prolific oil operation would only help fuel the Khartoum government’s war
against southern rebels, and the Clinton administration slapped sanctions on the operating company, in which Talisman owns 25 percent. Talisman was not directly sanctioned by the United States.
Buckee has maintained his company’s presence in Sudan would only improve conditions in the impoverished country. It has funded several local development, health care and education projects and has implemented a human rights monitoring system.
Still, he has conceded the uncertainty has held back the company’s stock price, despite record results and production from its business, which also includes operations in Canada, the North Sea, Indonesia and other countries.
Talisman would have been under more pressure to unload the Sudan assets if former Vice-President Al Gore had won the U.S.
election, Buckee told investors at FirstEnergy Capital Corp.’s energy conference.
However, the election of President George W. Bush and Vice-President Dick Cheney, both former oil men, and appointment of
Colin Powell as Secretary of State, have provided comfort, as have their comments on sanctions, he said.
“So, I can see the political climate, vis a vis the Sudan, may well improve, and in which case now would not be a good time to sell,”
The consortium, which also includes China National Petroleum Corp., Malaysia state oil company Petronas and Sudan’s Sudapet,
is currently producing a higher-than-expected 200,000 barrels of oil a day from the southern Sudan Heglig concession, and plans are in place for an expansion this year.
The U.S. sanctions issue will heat up this summer as part of the debate on whether to extend the separate Iran-Libya Sanctions Act, which threatens to punish foreign energy firms investing in the two