Strike three for oilsands critics
Statoil becomes third oil company to face down ethical revolt by shareholders
Bloomberg May 20, 2010 2:06 AM
Greenpeace activists protest outside the Calgary headquarters of Norway's state-owned Statoil on Monday, which was Norwegian National Day. Activists dressed up as Statoil CEO Helge Lund and Premier Ed Stelmach as a group of about 20 dipped a large Norwegian flag into a barrel of mock oilsands oil. They had tried unsuccessfully to get into the building to talk with Statoil executives.
Statoil ASA and its biggest shareholder, the Norwegian state, fought off an investor revolt against its Canadian oilsands project for the second year in a row at its annual general meeting.
A majority of shareholders at Norway's biggest energy company voted against forcing it to pull out of Canadian oilsands at Statoil's meeting on Wednesday. Statoil, which is 67-per-cent owned by the state, bought North American Oil Sands Corp. for about $2 billion in 2007 to tap an area estimated to hold the largest oil reserves outside Saudi Arabia.
"I understand the debate around this activity -- it's technically challenging and it presents several dilemmas we're working hard to contribute to resolve," said Helge Lund, chief executive of the company based in Stavanger, Norway. "But these resources are an important component of our future energy supplies."
Greenpeace and the World Wildlife Fund proposed a motion to scrap the project, backed by Norway's opposition Christian Democrats and shareholders Storebrand ASA, Folksam Group, Opplysningsvesenets Fund and the Alfred Berg Ethical Fund, which combined hold less than one per cent. The government opposed the motion after also defeating a similar effort last year.
"It's filthy, it violates the rights of the indigenous people and it destroys natural resources on a massive scale," said Rasmus Reinvang, a senior adviser at WWF, which bought Statoil shares as part of the effort. "We don't expect to win today, but this is an abscess that won't go away."
Royal Dutch Shell Plc and BP Plc, Europe's largest oil companies, have also faced opposition to energy-intensive plans to extract oil from oilsands in Alberta. Dwindling reserves in easier-to-access areas and rising prices are making oilsands and shale-gas developments more attractive to producers.
"Given that the government was of the opinion that Statoil's investment in oilsands was a business decision, it voted against influencing the company to withdraw from this at last year's AGM," Robin Kaass, state secretary at Norway's Oil and Energy Ministry, said in a statement. "The parliament has supported this stance on two occasions. Therefore the government will also vote against the motion at Statoil's AGM this year."
"If one can't really prove the benefits of oilsands extraction in Canada and that one can do it in a responsible fashion then one should pull out," Carina Lundberg Markow, head of responsible ownership at Folksam, which manages the equivalent of $30 billion, said by phone from Stockholm. "Statoil hasn't been able to prove this."
Statoil, seeking to counter dwindling output at home as North Sea fields mature, plans to start production at its 10,000-barrel-a-day demonstration Leismer project in Alberta at the end of the year.
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