Oil major BP yesterday easily saw off challenges to its Canadian oil sands project and to its executive pay policy at its annual meeting yesterday.
Europe’s largest oil firm by market value said 94 per cent of shareholders who voted in advance of the annual meeting rejected a call to review its Sunrise project to squeeze crude from Alberta’s bitumen-drenched soil. A group of shareholders including California Public Employees’ Retirement System (CalPERS), ethical investor Co-operative Investments and a raft of environmental groups tabled the resolution.
However, the resolution questioned the business on economic terms, saying Sunrise could become unprofitable if governments impose new charges for emitting carbon dioxide.
BP directors opposed the resolution, saying the firm had already factored in higher CO2 charges. The oil major also feared that being forced to publish a review of how it decided to invest in Sunrise could set a dangerous precedent which would complicate future investment decisions.
BP also faced criticism from some shareholders of its pay policies. Last week, influential corporate government governance body Pirc recommended shareholders vote against the remuneration report.
In the event, over 91 per cent of investors who expressed a preference before the meeting, supported the report. Last year, more than a third of investors voted against the report.
LONDON’S Excel Centre was transformed into a modern-day Colosseum as BP’s board came face-to-face with hordes of angry protestors at its annual meeting.
The FTSE 100-listed oil major knew what to expect – it has come under fire for both its decision to invest in controversial Canadian oil sands and hand executives’ handsome pay packages.
Campaigners lined the entrance, waving leaflets in shareholders’ faces detailing BP’s “broken promises” and repeating chants of “bloody oil” as it urged shareholders to oppose the group’s latest exploration activities. But the oil giant was taking no chances with security tighter than Heathrow airport to enter the cavernous auditorium for the company’s 101st annual meeting.
In his soft Swedish accent, chairman Carl-Henric Svanberg praised the company’s performance in challenging market conditions, careful not to remind his captivated audience that annual profits plunged 45 per cent after lower oil and gas prices depressed refining margins. However, chief executive Tony Hayward said BP added 7.5bn barrels of new resources to its portfolio in two years – effectively five years’ worth in under half the time – and remains confident it can hit its one-to-two per cent yearly production growth target to 2015.
Global consumption figures back it up, with the world’s energy demand growing at a rapid rate across developing countries. It’s how BP plans to play its part in supplying these burgeoning nations that has landed it in hot water.
BP has come under fire from a mix of lobby groups, environmentalists and ethical investors for its involvement in Canadian oil sands that they hail as “the most destructive project on earth.”
Fiona Bond, Interactive Investor
City A.M. Reporter