Harvard’s Sinopec Shares Remain

Harvard substantially reduced its holdings in two firms reportedly conducting business with the Sudanese government during the first quarter of 2005, but the University still appears to hold several million dollars worth of stock in the controversial companies.

The University’s April decision to divest from PetroChina, an oil firm accused of fueling the Sudanese regime’s genocidal campaign against its own people, did not end Harvard’s financial connection to the Khartoum government.

New documents filed with the Securities and Exchange Commission Wednesday reveal that as of March 31, Harvard owned 88,200 shares in China Petroleum and Chemical Corp., or “Sinopec.”

If Harvard has maintained its Sinopec stake on the New York Stock Exchange since March, the University’s shares would have been worth $3.43 million at the close of trading yesterday. Harvard would not be required to disclose Sinopec holdings on Chinese markets.

The University appears to have scaled back its Sinopec stake since the end of 2004, when Harvard reported a $5.76 million investment in the firm.

The size of Sinopec’s Sudanese venture pales in comparison to that of PetroChina’s parent, the China National Petroleum Company (CNPC), which has poured billions into the East African country, according to Peter S. Goodman, the Shanghai bureau chief of the Washington Post.

Sinopec is currently involved in the construction of a $65.5 million pipeline that will carry oil from the Melut Basin in the south of the country to Port Sudan, allowing the regime to boost its petroleum exports substantially.

“Sinopec is essentially a contractor, whereas [PetroChina’s parent] CNPC actually owns the lead shares in the consortium that runs Sudan’s oil patch,” Goodman wrote in an e-mail to The Crimson.

Still, Manav K. Bhatnagar ’06, an organizer of the student-faculty petition that helped spur the University’s PetroChina divestment, said that “Harvard has already admitted the close nexus between oil revenue and the ongoing Sudanese genocide.”

“In light of that, it is egregious that they continue to maintain their holdings in foreign oil companies in Sudan,” Bhatnagar said.

Meanwhile, the University continues to own stock in AO Tatneft, a Russian oil firm with reported links to the Sudanese regime. Harvard held 70,200 Tatneft shares at the end of March.

If Harvard has maintained that stake over the past month-and-a-half, its Tatneft holdings would be worth $2.23 million today. That marks a substantial reduction from the $11.46 million stake in Tatneft that the University reported at the end of 2004.

The apparent sale of Sinopec and Tatneft stock is consistent with the Harvard Management Company’s (HMC) move to reduce its exposure to emerging markets—a strategy that HMC president Jack R. Meyer disclosed in an interview with The Crimson yesterday. (See story, right.)

Tatneft signed a 2001 deal with Sudan’s energy ministry to explore oil fields in the central region of the country. The company’s chief geologist said in 2003 that he is “not enthusiastic about opportunities in Sudan.” That same year, Tatneft rebuffed an offer to join a cooperative oil producing venture with the Sudanese government.

But Bhatnagar said that “Tatneft is providing financial security for [Sudanese dictator Omar] al-Bashir’s regime and funding the genocide in exactly the same way PetroChina was.”

The Bush administration and the U.S. Congress have both called the Sudanese government guilty of “genocide” against black Muslim villagers in the Darfur region of western Sudan. Hundreds of thousands have died since civil war erupted in the region two years ago.

—Staff writer Daniel J. Hemel can be reached at hemel@fas.harvard.edu.