Berkshire Hathaway rejects calls to sell PetroChina stake

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Berkshire Hathaway, the investment firm controlled by Warren Buffett, has rejected calls to sell shares of PetroChina, whose parent operates in Sudan, a country accused by the U.S. Congress of genocide.

Selling the stock, which has gained 24 percent over the past year, would not "have a beneficial effect on Sudanese behavior," Berkshire said in a statement posted on its Web site. PetroChina cannot be held responsible for the action of its parent company, China National Petroleum, or the actions of the Chinese government, the company said.

"Subsidiaries have no ability to control the policies of their parent," the unsigned statement said. Referring to Sudan, it added, "Berkshire agrees that conditions in that country are deplorable and sympathizes with people who want to remedy them."

Campaigners like the Sudan Divestment Task Force, based in Washington, are trying to sway universities, investment companies and state pension plans to pull their money out of companies conducting business that directly benefits the Sudanese government. Militias backed by that government have killed more than 200,000 people, according to UN estimates.

Buffett, who said last June that he would give 85 percent of his wealth to charity, has made at least $2.3 billion for Berkshire by investing in PetroChina, the biggest Chinese state-controlled oil company.

The Sudan divestment group said on its Web site that it had made Berkshire Hathaway and Teachers Insurance & Annuity Association, among others, targets of a campaign to persuade them to shed Sudan-related investments. Fidelity Investments is feeling similar pressure from divestment advocates based in Massachusetts, according to the Web site Fidelity Out of Sudan.

Arnold Schwarzenegger, the governor of California, in September signed a bill that banned the state's two public pension funds from investing in companies that do business with the Sudanese government. The California Public Employees' Retirement System, the largest U.S. public pension fund, and the California State Teachers' Retirement System, the second-biggest, together control $350 billion in assets. New Jersey and Illinois have taken similar steps.

In addition to arguing that PetroChina is not responsible for the actions of its parent company, the Berkshire statement questions the value of getting China National Petroleum to pull out of Sudan. The stake held by China, it says, would be sold "almost certainly at a bargain price and almost certainly to the Sudanese government," a move that would only increase the government's oil revenue.

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