Canada: Oil Company Targeted for Ties to Sudanese Military

OTTAWA, CANADA -- An oil company headquartered in Alberta,
Canada, is the target of a divestment campaign
aimed at forcing the company to stop its partnership with the Sudanese
government in the exploitation of oil fields in the war-torn
southern region of Sudan.

Talisman Energy of Calgary, Alberta, Canada's largest independent oil
exploration firm, is under heavy fire for its 25% interest in
the Greater Nile Oil Project, currently pumping about 155,000 barrels of
oil per day in the African country.

Critics of the company say that it is actively involved in Sudan's war
Against its Christian minority. They have launched an assault
on the company's share prices by successfully lobbying North American
pension funds to sell their stake in the company.

A civilian airstrip in Sudan's southern oilfields is being used to
transport government troops and equipment to Talisman Energy's
controversial oil installations there, the company's chief executive has
revealed.

Jim Buckee, CEO of Talisman, made the disclosure in a personal letter to
John Harker, a Canadian envoy who visited the region
last month on a fact-finding mission for the Canadian government.

Harker returned from Sudan last week sharply critical of what he said are
Talisman's close ties with the Sudanese government and
its armed forces.

Last week, the divestment campaign against Talisman Energy gained momentum
as one U.S. pension group dropped its stake and
the state of New Jersey confirmed it is considering doing the same with its
680,000 shares.

Sudan has been torn for decades by civil war that has killed or displaced
millions of citizens.

Officials from the California Public Employees' Retirement System said last
week that its entire position, more than 200,000
shares of Talisman, were sold as of Dec. 31.

New Jersey, which holds 680,000 shares of Talisman in its investment
portfolio, is seriously considering divesting.

"We might very well end up backing out of this investment," Pete McDonough,
a spokesman for Christine Todd Whitman, the
governor, told the Bergen County Record. "The controversy is not going to
go away."

Last month, TIAA-CREF, a college teachers' fund, sold out of Talisman,
where it once owned 261,000 shares. It followed the
lead of the Texas Teachers Retirement Fund which dumped its 100,000 shares
in November.

Stephen Calderwood, a Calgary analyst with Salman Partners Inc., said the
divestment campaign has caused Talisman's shares to
fall 29% in the past year. Buckee's admission about the Sudanese military's
use of the airstrip refutes the firm's earlier denials that
it had no knowledge of how Khartoum was using the airfield, and that it
vigorously opposed any use of the strip by the military.

"I've heard from Dr. Buckee on more than one occasion that these oilfields
needed protection and that the protection was being
provided through the use of the airstrip by the government of Sudan,"
Harker said.

"He has said in a letter and in conversation that the airfield was being
used to provide defensive and logistical support to those
operations."

In November, a UN report found Sudan's government had used scorched-earth
tactics in order to clear a 100-kilometre zone
around the oilfields, using soldiers, bombs and helicopter gunships.

And relief workers in the region fear revenues from the project will help
Fund the Muslim-led government's war against Christians
in the south, where aid workers have reported burned-out villages,
starvation and the mass movement of refugees to the cover of
mountain areas.

Use of the strip came into question after Harker found evidence it was
being used by military helicopters and the government's
Russian-made Antonov cargo planes. Antonovs are sometimes used as bombers
by the Sudanese military. Harker fears the flights
may be part of the government's 44-year- old war against rebels in the
south, which in recent years has seen civilians near the
oilfields killed, maimed and driven from their villages.

The Canadian envoy immediately relayed his information to Lloyd Axworthy,
the Canadian Foreign Affairs Minister, who in turn
complained to Sudan's charge d'affaires in Ottawa. The minister also sent a
letter of protest to Omar Bashir, the Sudanese
president.

Axworthy had originally backed Talisman on the subject of the airstrip. He
Said the company knew of the flights but did not know
their purpose, adding that Talisman too had complained to Khartoum.

Jackie Sheppard, a spokeswoman for Talisman, told a Toronto-based newspaper
that employees had spotted aircraft using the
strip. But company officials "don't really know what they were doing," she
said.

The revelation that Khartoum is in fact using the strip to land armed
protection for the oil rigs raises significant questions about
Talisman's relationship with the government, say opponents of the firm's
presence in the area.

While Buckee stressed in his letter to Harker that the strip is being used
purely for defensive purposes, few critics now believe
Khartoum is observing its pledge to refrain from using oil operations as a
cover for war manoeuvres.

"Given the intensity of the fighting in western Upper Nile, it would be
naive in the extreme to believe that [Sudan] would confine
itself merely to defending an airstrip that offers such significant
offensive potential," said Eric Reeves, a U.S. college professor who
has led the divestment campaign to drive down Talisman's stock price.

"Besides, it is both unwise and immoral to put a civilian airstrip on the
list of military targets for the southern opposition forces."

In a conference call with Canadian reporters, a spokesman for the Sudanese
government denied the strip was being used for
military purposes, though he did acknowledge the military was protecting
the oilfields.

"All operations in the Heglig area need protection and there are some
security troops there in order to protect the oilfields and the
personnel," Ghazi Salahuddin, the Sudanese minister of culture and
information, said from Sudan.

"But we don't need such airstrips. This war has been going on for the past
44 years and we don't need a small airstrip that was
built only two years ago for the oil fields."

• 107 Energy
• 116 Human Rights