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At Talisman, we work hard at, and are proud of, our corporate responsibility performance. Some dismiss corporate responsibility reports as public relations exercises. I believe they create investor confidence, enhance transparency and improve accountability. Talisman’s annual corporate responsibility reporting and internal review process helps us improve our performance, demonstrate our commitment to responsible growth and engage the Company’s numerous stakeholders in open, honest dialogue. We prepare our Corporate Responsibility Reports so that our stakeholders can review our performance and judge our Credentials as a potential business, community partner or investment opportunity.
While oil and gas companies around the world, including Talisman, enjoyed record commodity prices last year, 2004 was marked by the volatility of global energy prices. Global forces including war in Iraq, terrorism in Saudi Arabia, labour strife in Venezuela, hurricane impacts in the Gulf of Mexico, the decline of global energy reserves and risks to energy security all contributed to energy price increases. Talisman recognizes that hydrocarbon energy is a vital but finite resource. While world oil and gas demand continues to set new records, industry struggles to meet that demand. Though there will be volatility, we believe that commodity prices for oil and gas will continue to rise as the world consumes hydrocarbons at faster rates than reserves are being replaced. That’s why today, it is important to use energy efficiently and extend the life of existing fields.
Talisman supports sensible, economic measures that will improve our energy efficiency. To that end, we completed construction of a 10-megawatt cogeneration facility at our Edson, Alberta natural gas processing plant in 2004. The $21 million facility is the first ever built at a sour gas processing plant in Alberta and one of the first retrofits of an existing plant to cogeneration.
Also in 2004, Talisman co-sponsored engineering and environmental studies in support of a potential wind farm project off the coast of Scotland at Talisman (UK)’s Beatrice platform. Based on those studies, we began a $58 million project to develop and construct two demonstrator turbines and first power is expected in 2006. The full Beatrice Wind Farm Project, if implemented as currently envisaged, could generate as much as 1,000 megawatts from up to 200 turbine units deployed in the vicinity of Talisman’s Beatrice oil field. I believe this could evolve into an economic energy source in time.
Talisman became a signatory to the United Nations-led Global Compact in February and committed to support the Compact’s ten principles in the areas of human rights, labour and the environment. Attending the Leaders Summit in June 2004, I was particularly impressed by the adoption of the tenth principle dealing with corruption. As with the Extractive Industries Transparency Initiative, widespread adoption would improve transparency throughout the world. As a member of the Global Compact, Talisman will report annually to our stakeholders on actions we have taken and lessons learned related to the ten principles.
Like everyone around the world, I was shocked by the massive destruction and loss of life caused by the tsunami that hit Southeast Asia on December 26, 2004. Talisman’s immediate concern focused on our employees working in Indonesia and Malaysia as well as three employees from our UK office vacationing in Thailand at the time. The Company immediately responded with contributions to humanitarian aid and relief efforts through our offices in Indonesia, Malaysia and the UK. The Company also agreed to match employee contributions in support of tsunami relief efforts. Talisman has contributed approximately $350,000 to date towards tsunami relief efforts. We have also pledged to work collaboratively with governments, non-governmental organizations and local communities to assist with both immediate and longer-term rebuilding efforts.
We are committed to eliminating health and safety incidents, significant environmental impacts and ensuring the continued safety and well being of our workforce. I am pleased to report that there were no fatalities, life-threatening occupational injuries or major environmental incidents at Talisman operations in 2004. We will continue to reduce oil discharged in the North Sea and we will continue to contribute to the responsible management of wildlife and access concerns in the Rocky Mountain foothills of Canada, among other priorities.
In 2004, Talisman was listed as a Top-100 non-financial reporter by a global benchmark survey released by SustainAbility and the United Nations Environment Programme (in conjunction with Standard and Poors). Further, the Company received honourable mention for corporate reporting by the Canadian Institute of Chartered Accountants (CICA) and the National Post. Despite acknowledgement of our positive work in the area, we remain committed to improving our performance in this emerging area.
As such, Talisman’s 2004 Corporate Responsibility Report has been prepared in accordance with the 2002 Global Reporting Initiative’s Guidelines. It represents a balanced and reasonable presentation of our Company’s economic, environmental and social performance.
Talisman’s mission is to create sustainable value for our shareholders in the upstream oil and gas business. To create that value, we look beyond traditional measures and benchmarks such as our financials at a more complete view of our overall corporate performance including our impacts on the communities where we operate and the environments in which we operate. While it is clear that we do not lack challenges, conducting our activities in a socially, environmentally and economically responsible way ultimately drives our business to create sustainable value for all our stakeholders. I believe our Credentials speak for themselves.
James W. Buckee
President and Chief Executive Officer
March 14, 2005
“Winning this [CICA] award is a very significant achievement. Setting the benchmark disclosure standard for your industry takes leadership from senior management and your board of directors, as well as a dedicated staff team. Your commitment to excellence in disclosure enhances both the reputation of Talisman Energy Inc. and of our market, and is greatly appreciated.” Robert Fabes, Senior Vice President, Toronto Stock Exchange