Chased from the Sudan, Canadian firm eyes T&T’s fragile swamp

Ugly past of Nariva’s new suitor

Investigation by MARK MEREDITH

Tomorrow, the newly-established Environmental Commission holds its maiden public sitting to hear a petition lodged by Canada’s largest independent oil and gas company, Talisman Energy Inc.

The company filed the appeal after being denied permission by the EMA to conduct seismic studies in the internationally-protected Nariva Swamp.

Talisman has enjoyed good fortune in Trinidad. It struck gold off the north-east coast with its Canteen-1 exploration well in Block 2 (c) in partnership with the Australian firm, BHP Billiton, BG International Ltd. and Elf Petroleum Trinidad. Last

October, it secured the rights to another potentially lucrative area, Block 3 (a), right alongside Block 2(c). In announcing the find, CEO Jim Buckee hailed It as being in the “multi-hundred million barrel range” and talked about drilling cores “dripping black oil”.

Despite its relative anonymity in this country, Talisman has a global operation that includes investments in Canada, the North Sea, Indonesia, Malaysia, Vietnam, the United States, Algeria and Columbia.

Until two weeks ago, it was also in the Sudan. Then, on October 30, Bucknee announced it was selling that profitable investment. Why?

Mark Meredith has been investigating Talisman Energy’s background and reports on how a highly profitable asset turned into a major political liability.

Talisman Petroleum (Trinidad) Ltd’s decision to appeal the EMA’s refusal to grant it a Certificate of Environmental Clearance (CEC) for 3-D seismic testing in Nariva Swamp surprised some in the environmental community who have been accusing the company of harbouring “a bullying attitude”.

Angry, perhaps, but they shouldn’t be surprised. It is not the first time such a charge has

been levelled against the Canadian, Calgary-based corporation, Talisman Energy Inc.

Those who hope that Talisman might quietly relinquish its desire to conduct explosive testing in Trinidad and Tobagos only internationally protected area, the Ramsar-listed Nariva Wetlands and Bush Bush Wildlife Sanctuary, along with forest and windbelt reserves, should be prepared for a long haul.

If recent history is anything to go by, sentimental attitudes are unlikely to carry much weight with “Canada’s petroleum darling”, its “biggest and best-performing petroleum company”, as Canadian Business Magazine once described the company.

For four years, up until October 30 this year, Talisman Energy Inc defied much of world opinion, including its own shareholders, and a global coalition of church and human rights groups in its quest for oil in one of the world’s most wretched countries, war-ravaged Sudan.

Talisman, a leading player among other foreign energy companies operating in Sudan, was among those accused by human rights groups and by separate Canadian and UN fact-finding missions of providing the oil revenues used by the the country’s Islamic government to finance its 19-year-old civil war

against mostly Christian rebels in the south.

It is a war that has killed two million people, displaced 4.5 million, and enslaved men, women and children.

On November 8, 2001, a class action complaint was filed in the US District Court of New York against Talisman Energy Inc on behalf of the Rev John Sudan Gaduel and The Presbyterian Church of Sudan and three individual plaintiffs.

The complaint charged Talisman with “violations of international law for participating in the Sudanese Government’s ethnic cleansing of Christian and other non-Muslim minorities in areas of southern Sudan where Talisman is exploring for oil”, according to the American Anti-Slavery Group.

The complaint alleged that, by its operations in southern Sudan, Talisman was engaged in an “unholy alliance” with the Islamic government in the north.

“Non-Muslim African residents of southern Sudan,” read the action, were and “are being, damaged by extrajudicial killing (including murder and summary execution), forced displacement, military bombings and assaults on civilian targets, confiscation and destruction of property, kidnappings, rape and slavery, related to or arising from the oil exploration and extraction activities of Defendants

Talisman Energy, Inc and the Republic of the Sudan (‘Sudan’ or the ‘Government’)...”

This, it said, was “only possible through Defendants’ collaboration and the Government’s utilisation of infrastructure, such as roads and airfields, constructed and maintained by Talisman.”

Reverend Gaduel, Pastor of the Presbyterian Church of Sudan in Bentiu, claimed churches in his parishes were bombed, church leaders slain and villages annihilated by helicopter gunships to clear the way for oil exploration.

A year ago, a UN investigator for the UN Commission on Human Rights, Gerhart Baum, said exploitation of Sudan’s oil reserves “has led to a worsening of the conflict, which has also turned into a war for oil”. Countries with oil interests in the Sudan included Canada, China, France, Iran, Malaysia, the Netherlands, Qatar and Sweden.

On October 16, 2001, a joint Canadian/British human rights mission released a damning report documenting the connection between oil development in Sudan and the ongoing atrocities.

It stated: “In the present circumstances, oil development and the associated presence of foreign oil companies in Sudan is damaging to the people of the oil areas. For their part, the

companies effectively assist the Government of Sudan war effort, thus exacerbating the suffering of the inhabitants of the oil area and making the prospect of peace more unlikely.”

Also in 2001, the human-rights group Christian Aid released “The Scorched Earth: Oil and War in Sudan.” It indicted foreign oil companies for “their complicity in Sudan’s “scorched earth” policy...oil company infrastructure, including airstrips and oil roads, are being used by government forces fighting in southern Sudan. Moreover, it is no longer possible for companies to claim ignorance of the effects of their operations...If the companies turn a blind eye now, it is a deliberate one.”

But Talisman was to “turn a blind eye” for a further year.

Talisman’s arrival in war-torn Sudan came in 1998 when it bought into Sudan’s Greater Nile project in a ten-to-one share swap with Arakis Energy, “a shadowy Calgary-based firm” that owned 25 per cent of a wider consortium of companies in Sudan, according to Canadian Business Magazine (CBM). It says Talisman acquired a billion-dollar property for a quarter of its value.

Talisman was formed in 1993, quickly becoming known as an independent company pursuing an “aggressive growth strategy”. Between 1993 and 1998, they spent nearly $4 billion acquiring

five Alberta-based companies, and similar amounts on properties in the North Sea, Algeria and Indonesia, according to CBM.

It was said that “what (Talisman CEO) Jim Buckee and company saw in Sudan was an oil basin so large that it was like walking into Western Canada 45 years ago”.

Until Talisman and others arrived in Sudan, the war was draining a million dollars a day from the fundamentalist Islamic government’s coffers.

A coalition of church groups and human rights agencies warned Talisman that oil production without peace would spell trouble. “It was told what would happen and discounted it all,” according to a CBM interview with Dennis Bennett, a Seattle-based risk analyst and investment banker. “Talisman did not go in blind.”

Nevertheless, Talisman’s oil began flowing in August 1999, part of a vision to turn Sudan into an oil-exporting nation rather than an importing one. Prior to that, Sudan’s biggest export was gum arabica, worth $11 million.

Within a few months, Talisman and company’s Greater Nile project had saved the government of Sudan $450 million in oil imports, more than it cost to fight the war. Talisman was accused of making an

investment that allowed the government to promote the war and avoid discussions for peace.

Finally, two weeks ago, bowing to years of controversy and a falling share price, Talisman sold its Sudan properties to a subsidiary of India’s national oil company for Cdn$1.2 billion.

Any remorse by Talisman for their role in Sudan’s suffering was not apparent in statements made by CEO Buckee at a press conference.

He said the company’s shares “have continued to be discounted based on perceived political risk in-country and in North America to a degree that was unacceptable for 12 per cent of our production. Shareholders have told me they were tired of continually having to monitor and analyse events relating to Sudan”.

Its decision to pull out was hailed as “an enormous social victory” by Gerry Barr, president of the Canadian Council for International Cooperation, whose members include 100 Canadian non-profit organisations.

“Here we have a company that went into Sudan into a zone of hot conflict against the advice of the government of Canada, contributed significantly to an intensification of the war and human rights abuse in the region. It is now able to walk away from this, selling its assets

and using the profits from that sale to bolster its share price. Is that really OK with us?” he asked rhetorically in the Canadian Catholic News.

The Sunday Express rang Talisman’s published address in Trinidad, suite 551/552 at the Hilton Trinidad, in an attempt to speak to someone from Talisman (Trinidad) Ltd. An anonymous voice requests one to leave a message. No mention of Talisman.

Visiting suite 551/552 proved equally fruitless. US$11 billion dollar-valued Talisman may have earned $1.2 billion from its Sudan sale, but it hasn’t invested in a visible office presence in a country where it hopes to have such a presence. It is paying a discounted “corporate rate” of US$150 per night for a suite (normally US$250), and has booked it until the end of the year.

However, the Sunday Express did eventually get to speak to Des Norris, Talisman’s Trinidad General Manager and the occupant of suite 551/552.

Norris was unable to comment on matters relating to the Commission’s hearing tomorrow, saying only that the company had been granted an exploration licence by the Government for oil and gas in the Eastern Block. He couldn’t say whether proceeds of Talisman’s Sudan sale would be used for operations here.

Norris, who has not worked in Sudan, said that Talisman’s presence had benefited communities in Sudan where they had built a very large hospital. There were many social programmes that the company had developed there. He said the conditions of the sale laid down guidelines to the Sudanese government regarding the use of their infrastructure and which prohibited their use for war related activities.