Case Study

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S w 9B09M035 TALISMAN ENERGY INC.: THE DECISION TO ENTER IRAQ Natalie Slawinski wrote this case under the supervision of Professor Pratima Bansal solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management…show more content…
Yet, despite the conflict, some analysts had seen great profit potential for Talisman in entering Sudan. One analyst had noted that the project would ““generate a lot of cash flow, and [would] be a very economic project, with a lot of exploratory upside.””1 Buckee himself had argued that the security situation was acceptable given that the Sudanese government protected the site and a fledgling peace treaty had recently been signed. He had felt that Talisman’’s share price would recover once investors saw the long-term potential of the project.2 Finally, the United Nations had recognized the Sudanese government, which provided legitimacy for the regime and helped reduce Talisman’’s political risks. Buckee and the board had decided that the in-country risks were manageable. For Talisman, the bet on Sudan had initially paid off. GNPOC extracted its first barrel in July 1999. Success, however, came at a cost. Shortly after investing in Sudan, numerous international nongovernmental organizations (NGOs) accused Talisman of fueling the civil war, believing the Sudanese government was using oil revenues to purchase weaponry. These NGOs accused Talisman of being complicit in the genocide that was taking place at the hands of the Sudanese government.3 The brutality of the conflict in Sudan had drawn enormous media attention. Since 1983, an estimated two million people, most of

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