updated 2/23/2007 7:28:45 PM ET 2007-02-24T00:28:45

Warren Buffett's Berkshire Hathaway is defending its investment in PetroChina and suggesting that the public entities selling off their stakes in the Chinese oil conglomerate are mistaken about its involvement in Sudan.

The Omaha-based holding company broke its own policy of not commenting on its investments and posted a Web statement about its 2.3 billion shares of PetroChina Co. in response to questions from shareholders and the media.

The United States and international humanitarian groups have accused the Sudanese government of using its oil wealth to wage genocide against the people in the western Darfur region, and some groups have suggested that PetroChina has supported the Sudanese government.

In Berkshire's unsigned statement, the company said it agrees that conditions in Sudan are deplorable and the company sympathizes with people who want to improve those conditions.

"We believe, however, that they are wrong in both their analyses of PetroChina's connection to these conditions and their belief that our divesting our PetroChina holdings would in any way have a beneficial effect on Sudanese behavior," the company said.

Calls to Berkshire Hathaway officials were not immediately returned Friday.

Pension funds in North Carolina and Vermont have decided to sell investments in PetroChina and other companies that state officials believe support Sudan.

Several universities, including the University of California, Yale, Stanford and Harvard, have sold investments in companies doing business in Sudan. And Illinois passed a law requiring that the state divest about $1 billion in pension investments in companies doing business in Sudan.

But Buffett's company said it has received no records that show PetroChina has operations in Sudan. Berkshire owns about 1.3 percent of PetroChina.

Berkshire said groups supporting the divestment of interests in Sudan may be confusing PetroChina with its parent company, Chinese National Petroleum Corp., which is owned by the Chinese government.

Berkshire said CNPC does do business in Sudan, but PetroChina shouldn't be held responsible for the actions of its controlling shareholder.

Andy Kilpatrick, the stockbroker who wrote "Of Permanent Value: The Story of Warren Buffett," said he thinks Buffett may have issued this statement to make his position clear before Berkshire Hathaway's annual meeting in May.

"I think he's probably heading off some move at the annual meeting," Kilpatrick said.

He said Buffett may have simply received enough questions about PetroChina that he decided issuing a statement was the best way to respond.

Berkshire said people who want China to withdraw its investment in Sudan should be careful what they wish for because if CNPC were to leave Sudan, CNPC would likely have to sell its pipeline and oil interests to the Sudanese government.

"After such a transaction, the Sudanese government would be better off financially, with its oil revenue substantially increased," Berkshire said.

"Proponents of the Chinese government's divesting should ask the most important question in economics, 'And then what?'" Berkshire said.

Berkshire owns furniture, insurance, jewelry and candy companies, restaurants, natural gas and corporate jet firms and has major investments in such companies as The Coca-Cola Co. and Anheuser-Busch Cos.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com