Talisman Energy Case Analysis Essay

1474 Words Mar 19th, 2013 6 Pages
Case Analysis: Talisman Energy Inc: The Decision to Enter Iraq

Talisman Energy Inc. after a failed oil venture in Sudan due to poor handling of public relations is contemplating entering Kurdistan after the Iraq War. The Sudanese fiasco was due to a portrayal of Talisman as a conspirator with the Sudanese government in perpetuating regional conflict and funding human rights abuses. The subsequent media firestorm and activist pressure spooked high-stakes investors who forced Talisman to withdraw. An equally dangerous and fluid political clime exists in the war-torn Kurdistan, with a regional government struggling with legitimacy and seeking foreign investment. Though the potential for profit is high and resources are plentiful, the field
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These funds for the large part went directly to the government and not to local communities. The problem with this was that these revenues were being used to fund additional hostilities in the nation, which raised the ire of the activist community. In Iraq, the instability of the KRG and its contested legitimacy make for a similarly tumultuous and fluid political situation. As a minority group in a war-torn region with a history of violence, foreign investment in Kurdistan is risky at best.
Talisman was not the first international firm to operate in the region, notably Chevron in the 1970s. However, after US sanctions checked the activities of American firms, Talisman was in an ideal position to capitalise on a market with drastically reduced competition. While this allowed them to focus on maximizing revenue, it also singled them out as there was nowhere to figuratively hide from international scrutiny. In other markets Talisman might be able to point out the activities of other firms as both justification and as a tool to detract from the negative press from the media at large; however in Sudan they were the only operator susceptible to the same exacting level of study. Similarly, in Iraq US companies were discouraged from operating in the region, and while there is another Canadian firm operating there; Talisman has a history of stigma with the media and would be jumping into the same hotbed of potential media furor that they experienced

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