OTTAWA – Once vilified as an oil industry bad boy, Calgary’s Talisman Energy Inc. has emerged as a leading light in the corporate responsibility movement, even as it expands its overseas oil and gas operations.
At the begin of this decade, Talisman Energy was a favourite target of human-rights activists, who routinely denounced its activities in war-torn Sudan, where the government was accused of using oil revenue to wage war on its own population.
But since selling its Sudanese investment in 2002, Talisman has successfully restored its reputation, and yesterday was named one of the world’s top international oil companies for its anti-corruption efforts in the foreign countries in which it operates.
In a report released yesterday, London-based Transparency International named Talisman and Norway’s state-owned StatoilHydro as the world leaders in their commitment to openness and anti-corruption measures.
But the company had little time to savour the kudos before facing another public relations challenge from its international operations.
At its annual meeting in Calgary today, a group of Amazonian natives plan to demonstrate against Talisman’s operations in Peru, which include plans to drill in pristine tropical rain forest of the Pastaza and Marona River basins.
Talisman – which operates in Colombia, Indonesia, Malaysia, Vietnam and the North Sea – acquired its Peruvian interests in 2006, and expanded them last year.
Its president, John Manzoni, was scheduled to meet last night with representatives of the Achuar people. Company spokeswoman Teri Keyser said Talisman conducted extensive consultations and received more than two-thirds approval in votes in local communities before commencing operations there. However, Andrew Miller, an American spokesman for the native protesters, said the consultations were restricted to local communities and the Achuar population of the broader region are opposed to development.
“There are some real reputational risks for Talisman here,” said Mr. Miller, in comparing the Peruvian situation with the company’s former Sudan problems. “There are some financial risks as well,” he added, noting native protests have shut down oil operations in the region in the past.
Talisman has made great strides in repairing its reputation.
In 2004, it joined the United Nations Global Compact, which lays out guidelines for international companies to follow in the areas of human and labour rights, environmental practices and corporate governance. Last year, Talsiman was added to the Jantzi Social Index, which a Toronto-based investment index for people who want to put their money in socially responsible companies.
Nancy Palardy, oil analyst for the Jantzi index, said yesterday that she would be monitoring Talisman’s Peruvian controversy to see how the company responds to the concerns raised by the Achuar group.
Huguette Labelle, chairwoman of Transparency International, said the company illustrated that it learned some valuable lessons after finding itself in the middle of a civil war in Sudan. (Its retreat from that oil-rich country was more than offset by growing Chinese and Indian investment.) In its report released yesterday, the international organization credited Talisman – along with its Canadian rivals, Nexen Inc. and Petro-Canada – for ensuring that all royalties, taxes and other payments made in host countries are fully revealed.
At the bottom of the list was the world’s biggest publicly-traded oil company, Exxon Mobil Corp. Exxon’s transparency ranked with the worst of the state-owned companies from China, India and Malaysia, which provide little detailed information about their activities outside their home countries.
While Exxon operates in some of the world’s most opaque and corrupt countries in the world, other companies receive higher marks for their disclosure, even in those regions. In Nigeria, for example, Royal Dutch Shell PLC was awarded top marks for its transparent business practices, while Exxon was judged well below average.
Transparency is critical, Ms. Labelle said, to ensure the oil-rich countries don’t fall prey to the “resource curse” in which windfall revenues undermine economic development, exacerbate divisions between rich and poor, fuel corruption in both the public and private sectors and may even lead to war.
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THE RANKINGS
HIGH PERFORMERS
BG PLC (Britain); BHP Billiton Ltd. (Australia); Nexen Inc. (Canada); Petro-Canada; Royal Dutch Shell PLC (Netherlands); StatoilHydro* (Norway); Talisman Energy Inc. (Canada), and Petrobras* (Brazil).
CHARACTERISTICS
Disclose tax, royalty and other payments on a country-by-country basis. Go beyond existing mandatory regulations.)
MIDDLE PERFORMERS
BP PLC (Britain); Chevron Corp. (U.S.); ConocoPhillips Co. (U.S.); Eni SpA (Italy); Amerada Hess Corp. (U.S.); Marathon Oil Corp. (U.S.); Repsol YPF SA (Spain); Total SA (France), and Woodside Petroleum Ltd. (Australia).
CHARACTERISTICS
Disclose revenues mainly on a regional basis and only in a few selected countries.
LOW PERFORMERS
China National Offshore Oil Corporation* (CNOOC); China National Petroleum Corporation* (CNPC); Devon Energy Corp. (U.S.); Exxon Mobil Corp. (U.S.); INPEX Corp. (Japan); Kuwait Petroleum Corp.*; OAO Lukoil (Russia); Oil and Natural Gas Corp.* (India); and Petronas* (Malaysia).
CHARACTERISTICS
Disclose revenue only on a geographic basis and provide almost no additional information relevant to revenue transparency.
* state-owned
Source: Transparency International
