By Lauren Krugel

CEO John Manzoni, a former BP executive who took over from Jim Buckee eight months ago, said the company will focus its portfolio on growing its North American natural gas plays as well as its existing offshore operations in Southeast Asia and Norway.

Assets in the North Sea, where Talisman is a significant player, will be "resized" so that the company can deliver a more sustainable level of growth, said Manzoni, suggesting there could be some divestitures in the region.

"Right now the North Sea is scrambling to grow as fast as it can, so any additional dollars that we have for investment get invested into the North Sea to grow," he told reporters after the meeting. "So rather than that stance, we're going to position the North Sea so that we can actually hold a consistent production level."

Talisman has no plans to make any play for the oilsands in northern Alberta, which has garnered a great deal of attention from Canadian and international majors.

The new strategy could also include pursuing projects in North Africa and in South America.

Manzoni held a private meeting with members of Peruvian indigenous groups who oppose any oil drilling on their land, since previous work by Occidental Petroleum Corp. has had catastrophic environmental and health effects on their community.

Talisman owns two oil properties in Peru's rainforest, where preliminary seismic work is underway.

After the meeting, Manzoni put in writing that Talisman will not go ahead with its projects in Peru if local communities do not give the company at least two-thirds support.

"Talisman will only operate where we have the support of the local community," Manzoni told reporters.

At the annual shareholder meeting, Apu Manuel Tampet Najarip, an elder of the Achuar people, said he hoped Talisman would deliver on its pledge.

"We want a different type of development that doesn't harm our lands because our lands are our markets, our livelihoods. So we implore the company to respect and adhere to our position that we do not want oil activities on our traditional lands," he said in a statement delivered through a translator.

Even though companies are required by Peruvian law to have two-thirds consent to move forward with any developments, one Achuar representative said Talisman's letter meant a lot to his people.

"The government does not comply with legislation. So Talisman, by making this commitment, is going beyond that," said Carlos Mukuin Tiris.

Manzoni said the company learned a lot about corporate responsibility from its experiences in Sudan.

In 2003, Talisman sold its oil assets in the troubled African country after human rights groups charged the profits were financing government atrocities. "Call it the school of hard knocks, but we've learned. And I think that stands us in good stead," Manzoni said.

Talisman reported first-quarter earnings of $466 million, or 46 cents per share, down from $520 million or 49 cents per share a year ago, when Talisman recorded a $277-million gain on asset sales. Revenues were $2.1 billion, compared to $1.88 billion a year earlier.

Talisman said production for the quarter averaged 419,000 barrels of oil equivalent per day, down 11 per cent from the same period last year because of the sale of non-core assets.

The company expects production in the range of 435,000 to 460,000 barrels of oil equivalent per day for the year.

During the quarter, the company spent $1 billion on exploration and development, down from $1.3 billion in the same quarter of the previous year.