Drama for oil majors

It’s not been a good week for oil majors accused of unethical behaviour.

Several big pension funds are worried about an upcoming court judgment against Chevron over environmental damage in Ecuador, the WSJ reports, adding that the potential damages could be bigger than the $3.5bn awarded against Exxon for its 1989 oil tanker spill. Three state public employee pension funds and their New York City peer have reportedly contacted Chevron directors asking how the group would protect itself against an unfavourable ruling.

Shell was earlier this week preparing for a civil court case over the death of Ken Saro-Wiwa, the Nigerian activist executed after campaigning against environmental damage by oil companies. His execution, along with that of eight associates, was widely condemned. Shell is accused of bribing two witnesses to testify against Saro-Wiwa, but denies this accusation and says it in fact pressed for clemency. The trial, which will take place in New York, has now been delayed under late May, but Shell meanwhile is also accused of reneging on its promise to reduce greenhouse gas emissions in its oil sands projects in Alberta. Canadian environmental groups yesterday presented an affadavit to the Alberta Energy Resources Construction Board and the Canadian government saying Shell had not met its goal of the project being “less carbon dioxide-intensive than the most likely alternative, which is imported crude”. Shell pointed to the voluntary nature of the commitments, as the FT story reports:

John Abbott, Shell Canada’s executive vice-president, said Shell had taken early voluntary action, making its ventures the least greenhouse gas intense of all mineable oil sands projects.

He indicated Shell was shifting from voluntary targets. “Alberta’s current regulations and the emerging Canadian policies recognise that the need to reduce emissions is too important to rely on voluntary commitments and, along with the rest of the industry, we are now focused on meeting these new regulatory targets.”

Related links:

Shell faces Alberta oil sands dispute (FT)
Pension funds fret as Chevron faces Ecuador ruling (WSJ)
Shell faces Saro-Wiwa death claim (FT)

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