afrol News, 21 February - The Norwegian company TGS-Nopec, engaged in "illegal" oil exploration off the coast of Western Sahara, today is warned by its largest shareholder about possible further divestment in the company. TGS-Nopec today expresses "regret" over its engagement.
The disputed territory of Western Sahara has been occupied by Morocco since 1975, while the legitimate representation of the Saharawi people, according to the UN, is the Polisario liberation movement. While TGS-Nopec is exploring Western Sahara's continental shelf for contractors hired by the Moroccan government, Polisario has demanded the company's withdrawal from the territory's waters.
Today, the Norwegian Public Pensions Fund, the largest external shareholder in TGS-Nopec, announced it was considering the possibility of selling out its shares in the company if it was not to withdraw from Western Sahara. A large number of small and medium sized Norwegian shareholder have already divested after the Norwegian Support Committee for Western Sahara launched its campaign against these exploration activities last year.
Director Tore Lindholt of the Public Pensions Fund today announced he considers joining the protest, emphasising the ethical problems of investing in a company that has been said to violate international law. Mr Lindholt told Ronny Hansen of the Support Committee the Fund was "in constant contact with TGS" at a meeting in Oslo this afternoon. It demanded TGS reacted to the massive protests.
According to Mr Hansen, a recent speech by Norway's Deputy Foreign Minister, Vidar Helgesen, had made the Fund's government-appointed board of directors change their mind on the engagement of TGS-Nopec. Mr Helgesen had expressed clear doubts about the legality of these explorations, both according to international and Norwegian law.
Mr Lindholt however wishes to continue the Fund's ownership in TGS-Nopec, at least time being, to be able to influence the company from within. He hopes continued pressure from its biggest shareholder may contribute to a change of heart regarding TGS-Nopec's Western Sahara engagement.
During the meeting, the Public Pensions Fund admitted its failure to react at an earlier stage, calling it a "blunder" to have continued buying shares in the last half of 2002. The Fund's leadership now promised a "thorough and professional" internal handling of the case because a possible ethically based sell-out could "set standards for how we and others will treat similar cases in future."
Owning 7 percent of the shares in TGS-Nopec, the Public Pensions Fund is the biggest shareholder in the company, and has for months been under intense pressure from politicians and NGOs to pull out of the company. Activists are only partly satisfied by the signals from the Fund today.
For the Saharawi part, time is precious. TGS-Nopec says it already has concluded the seismic investigations offshore Western Sahara and is now in the process of analysing the results. These results are to be handed over to French TotalFinaElf and US Kerr McGee, which have been given exploratory concessions by the Moroccan government. Also the Moroccan state oil company is to be given a copy - something that would put Morocco a significant step closer to start possible oil exploitation off Western Sahara.
The UN has stated that such resource exploitation would be clearly illegal. According to Deputy Foreign Minister Helgesen, however, there is no material difference in explorations and exploitation in a disputed territory, "according to the Norwegian point of view." The UN had only concluded it was not recommendable to engage in exploitation.
Meanwhile, the value of the TGS shares at the Oslo stock exchange have sunk to less than one third within one year; more or less the time period of protest action against the company's engagement in Western Sahara. This has meant that every shareholder divesting in protest has lost considerable money, something the Public Pensions Fund is well aware of.
While the biggest shareholder in TGS-Nopec now is considering the consequences of leaving the sinking ship, also another major shareholder, Storebrand Ltd, is thinking of a possible divestment. Storebrand is Norway's leading insurance company, but also the country's leading stock market analyst, meaning that a Storebrand divestment could have far reaching consequences for TGS-Nopec.
Earlier this week, Storebrand market analysts told Mr Hansen from the Support Committee for Western Sahara that the company is currently engaged in an analysis of its engagement of the TGS share on ethical grounds. Storebrand would however not announce its possible divestment to the media, not the least because of the possible consequences for the value of the TGS share, which the company, after all, would have to sell.
TGS-Nopec, it seems, thus is receiving the final warnings from the market to disengage in Western Sahara or to face a collapse of its market value at the Oslo stock exchange, where it is registered.
Also the legal pressure against TGS-Nopec is now increasing. According to Mr Hansen from the Support Committee, there are plans to sue the company "in Norway and abroad," to provide a test case of the legality of such operations in occupied territories. "According to legal experts we are in touch with, this project is probably illegal according to international law, something meaning that TGS could be obliged to pay damages."
Now, also TGS-Nopec seems to be seeing the writing on the wall. The company's Finance Director, Arne Helland, has been stubbornly defending the engagement off Western Sahara, which he initially called "Morocco's southern provinces," since the protests began.
The signals from Mr Helland are now slowly changing. At a meeting in the Oslo Parliament today, Mr Helland was given a protest letter signed by around 600 persons, organisations, political parties and MPs. Mr Helland informed that the company now had asked for a meeting with the Norwegian government to discuss its engagement in Western Sahara.
A visibly nervous Mr Helland had to admit to the Support Committee it had been "an unwise decision" by TGS-Nopec to engage in Western Sahara and that, knowing what he knows today, it would never have been done. Promising the company would not get involved in "new works" for the Moroccans in Western Sahara, Mr Helland however declined from interrupting the ongoing works.