Shell investors reject tar sands resolution

Published on Tuesday 18 May 2010 20:05

INVESTORS in oil major Shell have rejected a resolution seeking to challenge the company's multi-billion investments in Canadian oil sands projects.

A group of ethical investors, environmentalists and indigenous groups had urged Shell to reconsider its plans to squeeze crude from Alberta's bitumen-drenched tar sands fields.

Oil sands production produces more than traditional oil production, uses more water and involves greater destruction to the landscape. Charges for emitting can also prove costly for projects.

Shell, Europe's largest oil company based on market capitalisation, had urged investors to vote against the resolution, saying it had already considered potential charges for in its initial business plans.

At the company's annual shareholders meeting yesterday, just under 94.3 per cent of investors voted against the proposal, which had challenged Shell on the financial risks that oil sands projects might pose.

BP beat off a similar challenge to its Canadian oil sands project last month.

Oil majors have come under close scrutiny as BP battles to contain a potential environmental disaster from an oil slick in the Gulf of Mexico, with some 20 billion in value already wiped off BP's value since the explosion on its Deepwater Horizon rig.

Campaigning organisation FairPensions, which co-lodged the resolution at the Shell AGM, said 11 per cent of shareholders had rebelled or abstained.

Duncan Exley, director of campaigns at FairPensions, said: "Today sent a clear signal that shareholders are concerned about the risks associated with tar sands, and need to see greater transparency from Shell.

"Tar sands have shot to the top of the City's agenda, and the oil companies have been forced to respond."

At yesterday's AGM, almost 100 per cent of shareholders had voted in favour of the firm's 2009 executive pay remuneration report.

Shareholders had rejected the executive pay plan last year, prompting the group to enter talks with major investors.