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Talisman believes that being a responsible and welcome member of the communities in which we operate is an essential part of our business strategy. Strong and transparent relationships with communities, based on trust and respect, allow the Company to effectively and efficiently carry out operations to the mutual benefit of the Company and our neighbours. Talisman’s commitment to community relationships is based on community consultation, local benefits and respecting diverse cultures.
In 2004, the Company strengthened the coordination between its Surface Land and Community Relations groups to further improve consistency and delivery of community consultations with landowners, aboriginal communities, NGOs and regulators. Talisman also began development of a community consultation tracking system to improve management of certain stakeholder consultations. The Company also continued to implement Community Relations Area Strategies for each Canadian operating area. In all, we notified or consulted with about 45,000 people across Canada in support of 1,345 projects including well site acquisitions, minor tieins and major pipeline work.
Talisman’s timely consultation with North American landholders often influences aspects of our project development plans.
In 2004, based on feedback from a local trapper, a development team working in the Edson, Alberta area drilled two different sub-surface wells from one surface location, resulting in less surface disturbance.
Further, due to early feedback from numerous stakeholders in the Grande Cache, British Columbia area, sensitivities were considered during the internal development phase regarding a proposed 70-kilometre pipeline construction project. Aboriginal elders, trappers and government regulators were shown the proposed route and asked for feedback.
Community open houses and career fairs are often part of Talisman’s consultative process. We support specific projects or community appreciation events for local farmers and ranchers and aboriginal career fairs for students interested in participating in the oil and gas industry. In 2004, about 1,500 people attended 26 open houses and aboriginal career fairs Talisman hosted or actively participated in across Canada.
Talisman continues to be involved with numerous multi-stakeholder groups in Canada, which bring industry, public and regulators together to create an opportunity for dialogue and to build understanding. These groups include the Edson Creative Solutions Synergy Group, the Southwest Alberta Sustainable Community Initiative, West Country Stakeholders, Rimbey Multi-Stakeholder Group and the Warburg Surface Rights Group.
In 2004, Talisman’s Corporate Responsibility and Government Affairs group attended conferences, presentations and workshops led by academics and industry associations in North America and Asia including the Globe 2004 conference in Vancouver and the CSR Asian Forum in Malaysia to further our knowledge of best practices in corporate responsibility. Further, we attended almost 70 meetings with government officials in both Canada and the US. International meetings were also held with several Ambassadors, High Commissioners and embassy officials.
Talisman’s indirect, wholly owned subsidiary, Fortuna Energy Inc. (Fortuna), faced a number of community relations challenges in its central New York State operating area in 2004. These challenges were the result of two fundamental stakeholder concerns.
One concern stemmed from a requirement of the New York State Department of Environmental Conservation that royalty payments be withheld until certain issues and disputes related to spacing unit configurations and terms of compulsory integration for uncontrolled parties were resolved. In some cases, royalty payments had been delayed for over four years.
In December 2004 and early January 2005, the Department of Environmental Conservation (DEC) rendered two interim decisions resulting in the final configuration of spacing units for numerous wells that allowed for the release of royalties to the respective landowners who have leases with Fortuna. Fortuna will continue to work with the DEC in an effort to facilitate the earliest possible release of royalty payments to Fortuna leaseholders for other wells that are not yet resolved.
A second issue relates to landowner concerns about the conduct of energy companies with respect to the acquisition of mineral and surface access lease agreements. In response to these concerns, the New York State Attorney General announced on October 6, 2004, an investigation into these issues. This investigation is ongoing. As a leading member of the energy industry, Fortuna has cooperated completely with the Attorney General’s office and has instituted formal Landman Leasing and Public Consultation Protocols to more effectively manage its relationship with the public.
Fortuna is also taking a number of steps to increase and improve the level of dialogue within the communities where it operates to more effectively communicate with area residents about Fortuna, its operations and policies, the industry and the shared benefits associated with the development of natural gas resources in New York State in 2005.
In June 2004, the Bureau of Land Management (BLM) opened the northwest portion of the National Petroleum Reserve-Alaska for potential oil and gas development. Through a lease sale, Talisman’s subsidiary, FEX L.P. acquired exploration acreage. However, the Northern Alaska Environmental Center (NAEC) challenged the BLM over its decision. Late in 2004, the US District Court in Alaska ruled in favour of the BLM. This decision has been appealed by NAEC.
In 2004, Talisman’s subsidiary, Talisman (Trinidad) Petroleum Ltd. [Talisman (Trinidad)] conducted 24 consultations with various industry, government and not-for-profit stakeholders. In addition, Talisman (Trinidad) held public consultations as part of the Environmental Impact Assessment requirements for the seismic program in the Eastern Block of southern Trinidad. The open houses were held in the Rio Claro region, the largest town in our exploration area. Upon receipt of approval to perform the seismic work from the Environmental Management Authority, Talisman (Trinidad) completed two large seismic programs in the Eastern Block of southern Trinidad, employing up to 700 local people daily on a rotating basis.
Looking ahead, Talisman (Trinidad)’s proposed drilling program will require significantly less local employment as the work is not as labour intensive. This decrease in local employment requirements was communicated during Eastern Block open houses. In an attempt to maximize local content and employment opportunities, Talisman (Trinidad) has approached its sub-contractors to seek out local service providers, where feasible, during the construction and drilling phases.
In 2004, Talisman’s Manager of Corporate Responsibility and Government Affairs met with Talisman (Corridor) Ltd.’s co-venturer to discuss corporate responsibility issues related to the Corridor natural gas project. During the trip to the region, Talisman representatives visited various community development projects supported by the Company, gaining a better understanding of the community and local government relations issues faced in the area.
“As the natual gas industry continues to grow, it’s a learning experience, not only for the landowners, but the gas companies, as well as the New York State DEC.We’ve all made mistakes. And as we begin the process of correcting these, I feel that the existing leases may need to be brought up to the updated standards, to the new accepted standards.” Excerpt from a transcript from an interested landowner during legislative hearings held in RI, New York on November 16, 2004.