Case Study Essay

6594 Words Sep 29th, 2013 27 Pages
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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
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Public interest groups had claimed that these monies were fueling the Sudanese civil war, one of the most heated conflict zones in the world. These activists had succeeded in raising not only the profile of the issues, but also the ire of investors and the U.S. and Canadian governments, which eventually resulted in Talisman exiting Sudan in 2003. The board had many questions about Talisman’’s decision to move into Iraq, including the political situation, the views of the U.S. and Canadian governments and, especially, the US$220 million fee to the Kurdistan Regional Government (KRG). Should Talisman enter Iraq given the risks? If so, how could Talisman avoid experiencing the same outcome as in Sudan?
TALISMAN’’S EXPERIENCE IN SUDAN

Talisman invested in Sudan in 1998, through its acquisition of Arakis Energy Corporation, a Canadian independent oil company. This takeover gave a wholly owned Talisman subsidiary a 25 per cent non-

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operated interested in the Greater Nile Petroleum Operating Company (GNPOC), a company established to conduct oil operations in Sudan. Other co-participants in the GNPOC included the national oil companies of China, Malaysia and Sudan. The decision to enter was not without its risks but the rewards were potentially very high.

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