During the past 12 months, Jim Buckee’s facial features have been pistol-whipped raw by the righteous and the self-righteous alike.
As head flak-catcher for Calgary-based Talisman Energy Inc., the president/CEO has stood glumly in the line of fire, as his company has been vilified by professional humanitarians and demonized by the merely sanctimonious.
But, today, as he steps tentatively into a young year, those beads of sweat may be drying on Buckee’s brow.
“I think (the criticism) is receding, and I think — I hope — over time, people will see that if we withdrew, Sudan and the world would be worse off,” said the man who built Canada’s largest independent oil producer, during a rare, in-depth interview.
Angst and humble pie took turns as Buckee’s dietary staple throughout a long, grim year, during which a Sudanese oil project, of which Talisman owns 25 per cent, had sanctions slapped on it by Washington, and was criticized by Ottawa.
Every North American journal, from Maclean’s to the Village Voice, has laid a licking on Buckee and the eight-year-old company, which cranks out higher volumes than any other Canadian oil producer.
Early last year, Talisman’s Canadian share price was tanking in the $35 range.
One reason: the report of Canadian envoy John Harker, which concluded Talisman’s partnership with the Sudanese government in the Greater Nile Petroleum Operating Company (GNPOC) “adds more suffering” to the miserable masses in a country bled dry by civil war.
After that, Buckee and his PR shock troops launched a near-desperate exercise in damage control. They embraced several human-rights recommendations, addressed to them by Amnesty International.
Buckee, 54, pledged that Talisman wouldn’t stand “silent witness to human-rights violations.”
He claims credit for sweet-talking his GNPOC partners — including the China National Oil Company and Petronas of Malaysia — into signing a code of ethics. It stresses “social justice” and acceptable labour standards.
Meanwhile, a team of onsite Talisman staffers works full time on social and humanitarian issues.
And the company has spent a fortune on medical clinics, food, supplies, fresh water and electrical power.
“It’s been millions,” Buckee said.
Jim Buckee is not the “mea culpa” type. He’s tough, and clever enough to know when to exercise his back-pedalling muscles. But, in Buckee’s defence, he has put company money where his mouth is.
There are other reasons Buckee is cautiously breathing more easily at the dawn of 2001.
Talisman shares on the TSE closed out 2000 at a more respectable $55.65. And, as the year wound down, analysts were trumpeting the company as a strong buy, based on its corporate strategy — exploration and acquisition of domestic gas reserves, while working its lengthy roster of international plays. Some believe Talisman’s global future is unlimited.
Another Talisman plus, analysts feel, is management.
That would be Dr. James W. Buckee, PhD, the former Oxford astrophysicist who first got his hands dirty mucking about as a lowly “jug hustler” with an Australian seismic crew.
The English-born son of a Royal Navy lieutenant-commander, Buckee was a youngster when the family moved Down Under. There, he found the oil business a source of vacation jobs while in pursuit of academic goals.
Buckee graduated with honours in science from the University of Western Australia and, subsequently, earned a scholarship to study astrophysics at Oxford.
But to earn spare coin as a student, he continued toiling as an oilpatch grunt. “Counting sacks of cement, measuring casing links, changing shaker screens — a very humbling experience. But a good way to learn the business,” Buckee said.
At Oxford, Buckee specialized in pulsars. But NASA indirectly scuppered his “fairly serious” designs on an academic career.
NASA personnel cutbacks pre-dated Buckee’s arrival on the job market, so the ex-NASA types pounced on the best jobs left in his field.
“Oil companies offered lots of money, exciting times, travel — and I’d had some limited exposure,” he reasoned.
So the scholar left Oxford in 1970, aged 24, and took his doctorate over to Shell the following year.
His tour with Shell, followed by a posting with Burma Oil, ultimately led Buckee to British Petroleum, where he became an expert in North Sea operations, and ultimately chief reservoir engineer with BP Exploration.
He worked with BP in Alaska before taking over as president and CEO of BP Canada — which took a hike in 1992, believing, according to Talisman legend,“there were no more elephants in Canada.”
Buckee’s response?
“I was blindsided,” he said.
Nevertheless, he helped Talisman spring from the ashes.
Based on careful studies of global oilfields done for BP Alaska, Buckee concluded a world “currently consuming 27 billion barrels of oil a year, and finding six or seven billion (via exploration) was a disaster waiting to happen.”
“The obvious thing to me was, that a lot of companies would’ve been better to forget all that exploration, and just acquire,” Buckee continued.
“And that formulated at least half Talisman’s strategy.”
Acquire Talisman did, including a broad base of foreign holdings: Bow Valley Energy Inc., Pembina Resources. And then, two years ago, Arakis Energy and its interest in Sudan.
Shortly thereafter, the spit hit the fan.
Humanitarian agencies charged Talisman with exacerbating the civil war by helping oil revenues pour into the pockets of the Sudanese government. The company was accused of complicity in genocide and a Sudanese slave trade.
In the Village Voice, Nat Hentoff compared Talisman to companies which traded in South Africa during apartheid. He reported that institutional investors were dumping Talisman shares in protest and that others were threatening to follow suit.
Some insiders — possibly even Buckee himself — remain convinced the high dudgeon, and the scorn, amounted to cheap shots against an easy target, based on biased information of questionable accuracy.
“Who else ever got the Chinese to agree to an ethics code on anything?” asked one.
But the official company line is clear: A pullout seems out of the question. Instead, a policy of “constructive engagement” remains the answer.
“What have we learned? We have to ensure, as we have in Sudan, that we’re welcomed by the community, that our presence benefits the community, and we’ve been working very hard to that end in Sudan,” Buckee summed up.
“You’ve got to start somewhere. Generating some wealth for the people, giving them employment, medicines, and so on — it’s got to be good.”
A team from PricewaterhouseCoopers will deliver its verdict on Talisman’s first “corporate responsibility report” this year. The team is led by chartered accountant Jennifer Woodward, a member of the Amnesty International UK Business Group.
To illustrate, Buckee trotted out a quote from French philosopher Charles Montesquieu, which Village Voice’s Hentoff might find tough to swallow: “Commerce is a cure for the most destructive prejudices.”
The CEO is more convincing when he cites his belief that, in terms of exploiting oil reserves, the consumption-happy West has about run out of easy options.
To maintain current levels, oil companies will be increasingly forced to set up shop in global hot spots — maybe even to deal with the devil.
He bases that belief on his own research, citing Alaska’s Prudhoe Bay as a global paradigm.
Buckee was with BP Alaska when the famous field began to drip dry during the late 1980s.
“George Nelson was on a call to Sir John Browne (now CEO of BP Amoco),” Buckee recalled.
“George said: ‘We’ve got all pumps up, but we can’t make numbers.’
“And John said at the other end: ‘Get this, George, that field will not decline, you hear me?’” Buckee smiled wanly at the irony.
But production did decline — between seven and 12 per cent a year through the ’90s. By 1999, production had fallen to 35 per cent of its peak.
“Here was a field that had all of BP’s engineering, all of Exxon, all of Arco — it was the most engineered field in the world,” Buckee continued. “And when it goes — shwoosh — it’s gone, just like that. All fields everywhere in the world will do this.”
Buckee later gathered enough data to model 80 per cent of the world’s oil fields.
“And guess what — it crashes. In 1990, it looked as though things would start to get tough when (global production) reaches about 80 million barrels a day — we’re not there yet,” he said.
“But we better face it. It’s going to be harder and harder to produce oil.”
That means a need to do business where “God put the oil,” as Buckee put it. Places such as Africa, where Buckee says 28 of 52 countries are torn by civil war.
Places such as Iraq, Iran, Libya — all under sanction.
Places such as the Caspian Sea — does the name Chechnya ring a bell? “They’re in turmoil and conflict, but that’s where the oil is,” said Buckee.
“If you’re gonna be an international player, you’ll have to cope with those things somehow.”
So perhaps Talisman’s Sudanese adventure will go down in corporate lore as a blueprint demonstrating how — or how not — to proceed.
