Talisman Energy Inc. the Decision to Enter Iraq
Executive summary:
Before entering Iraq, Talisman must do their due diligence in order to maximize profits and minimize risks. Due diligence would require a thorough review of both surface and subsurface risks to successfully extracting oil from Iraq and bringing it to market. It is important that they clearly indicate what needs to be done. Given Talisman’s background in Sudan: 1) Being accused of indirectly giving weapons to the Sudanese government by the NGOs which created lots of media attention and bad press. 2) Talisman used their influence and adopted steps to stop human rights abuse in Sudan, leading them to become the largest independent oil and gas firm on the basis of revenue. 3) NGOs and Sudanese people formed a lawsuit against Talisman insisting they were assisting the violation of human rights in Sudan, which then lead to Talisman having to sell their share of the Sudan case. Given the current activity in Iraq: 1) Surface risks: - substantial risk that the government may decide to expropriate the land and nationalize oil production, - ongoing concerns having to deal with corrupt military, police and government representatives, - infrastructure concerns and communication abilities and - potential outside influences from NGOs will also have to be addressed. 2) Subsurface risks: -proof of oil but hasn’t been found by the other Canadian oil company. In addition, Talisman has factors that make investing in Iraq desirable: -proof of 39 billion barrels of oil, - Kurdistan is said safer and has political stability.
In order to make investing in Iraq profitable and a success, the alternative that will benefit Talisman is to negotiate a balanced agreement with the Kurdistan government. By doing this, Talisman is able to have control of what is to be done in order for the people of Kurdistan are properly treated, for human rights to be respected etc. This alternative will keep NGOs off of their back, create a good company image, attract investors, generate
Before entering Iraq, Talisman must do their due diligence in order to maximize profits and minimize risks. Due diligence would require a thorough review of both surface and subsurface risks to successfully extracting oil from Iraq and bringing it to market. It is important that they clearly indicate what needs to be done. Given Talisman’s background in Sudan: 1) Being accused of indirectly giving weapons to the Sudanese government by the NGOs which created lots of media attention and bad press. 2) Talisman used their influence and adopted steps to stop human rights abuse in Sudan, leading them to become the largest independent oil and gas firm on the basis of revenue. 3) NGOs and Sudanese people formed a lawsuit against Talisman insisting they were assisting the violation of human rights in Sudan, which then lead to Talisman having to sell their share of the Sudan case. Given the current activity in Iraq: 1) Surface risks: - substantial risk that the government may decide to expropriate the land and nationalize oil production, - ongoing concerns having to deal with corrupt military, police and government representatives, - infrastructure concerns and communication abilities and - potential outside influences from NGOs will also have to be addressed. 2) Subsurface risks: -proof of oil but hasn’t been found by the other Canadian oil company. In addition, Talisman has factors that make investing in Iraq desirable: -proof of 39 billion barrels of oil, - Kurdistan is said safer and has political stability.
In order to make investing in Iraq profitable and a success, the alternative that will benefit Talisman is to negotiate a balanced agreement with the Kurdistan government. By doing this, Talisman is able to have control of what is to be done in order for the people of Kurdistan are properly treated, for human rights to be respected etc. This alternative will keep NGOs off of their back, create a good company image, attract investors, generate