Fossil fuel companies are increasingly coming under pressure from investors. Together with Platform and ShareAction we have worked to challenge the industry's business model for several years. We have developed a unique risk matrix that allows us to analyse macroeconomic risks as well as technical, legal and regulatory challenges in high risk projects, such as offshore Arctic drilling.
For further information, please contact Charlie Kronick at charlie.kronick@greenpeace.org or Louise Rouse at louise@louiserouse.org or on +44 7751 256163.
Forecasting Failure: Why Investors Should Treat Oil Company Energy Forecasts with Caution
For shareholders, it’s essential that allocations of corporate capital made by oil companies to multi-decade, high-cost projects are based on robust judgments about the future. ExxonMobil, Shell and BP alone are expected to invest US $250bn of capital in the next five years.
In this report we reveal how energy models are constructed, and highlight their central weakness: by extrapolating existing trends, they tend to predict that the future will be just like the present, while masking underlying potential for disruption. The report also includes a comparative analysis of the oil majors’ current approaches to thinking about energy futures, and identify strengths and weaknesses.
Flawed Fundamentals: Shell’s and BP’s stalled tar sands ambitions
Since 2014, 42 tar sands projects have been put on-hold, delayed, or cancelled. These include the cancellation of Shell’s Carmon Creek project and the postponement of Phases 2A and 2B of the BP/Husky joint venture Sunrise project. The risks that have stalled the predicted unchecked growth of the tar sands combine to suggest structural rather than cyclical changes in the oil industry and represent a significant setback to the IOCs’ frontier driven growth model.
This report outlines the factors other than the current oil price that have led to stalled growth in the tar sands and focuses on BP’s and Royal Dutch Shell’s intended expansions of their tar sands operations in Canada and assesses their future commercial viability.
Read the report here:
Flawed Fundamentals: Shell’s and BP’s stalled tar sands ambitions
The report is accompanied by an investor briefing. The briefing includes questions for investors to ask Shell and BP in order to understand their plans for their tar sands assets and to assess the companies’ understanding of and preparedness for the wider impacts of shifting conditions in the oil industry .
Read the briefing here:
Climate Liability: The New York attorney general's investigation of Exxon Mobil
On 5 November 2015 it was reported that the New York attorney general had opened an investigation of Exxon to determine "whether statements the company made to investors about climate risks as recently as this year were consistent with the company's own long-running scientific research".
On 20 January, it was reported that the California attorney general has also opened an investigation into the adequacy of Exxon Mobil's climate risk disclosures.
This new investor briefing outlines the investigation, the possible consequences, and the potential vulnerability of other fossil fuel companies to similar scrutiny. Read the briefing here.
Russian Roulette: Impacts for BP and Rosneft of continuing international sanctions
US and European sanctions against certain Russian industries and individuals in response to the Ukraine crisis have now been in place for twenty months. The sanctions prohibit IOCs from providing services, goods, or technology to frontier oil projects in Russia. They also restrict financing for a set of Russian companies, including Rosneft and Gazprom.
This briefing lays out the implications of IOCs (particularly BP) of the continued sanctions regime, recent political developments and changes to Rosneft's board. Read the briefing here.
Costly Coal: Standard Chartered's role in a coal project threatening the Great Barrier Reef
UPDATE: Standard Chartered publicly announced that they would end their advisory mandate shortly after this briefing was released.
UK bank Standard Chartered was the lead advisor on the Carmichael coal mine in Australia. The project would be one of the biggest mines in the world and requires construction of one of the world's largest coal ports in the Great Barrier Reef. This briefing outlines the potential impact of the project on the Reef and the key risks for Standard Chartered from its involvement.
Read the briefing here.
Frozen Future: The gaps in Shell's Arctic spill response
Shell is currently moving its drilling rigs to Seatte in anticipation of resuming its US offshore Arctic drilling programme in July. However, it is far from clear that Shell has adequate physical or financial plans to deal with the impacts of a major oil spill in this remote region.
This briefing examines the significant challenges in dealing with such a spill, including a lack of response infrastructure, the ineffectiveness of key response tactics, and a lack of understanding of key aspects of the dynamic Arctic region.
Read the report here.
Frozen Future: Shell and the US Arctic
On 29 January 2015, Royal Dutch Shell confirmed that it intends, subject to regulatory approval, to resume its US Arctic drilling programme at a cost for 2015 of at least $1bn. To date, Shell's Arctic programme has been a failure despite capital expenditure in excess of $6bn. 2012's drilling season beset by multiple operational failings was followed by a 'pause' for 2013 and a forced reversal of 2014 plans because of a US court decision.
This briefing examines Shell's experiences and outlines operational and economic risks. We suggest questions investors should ask Shell, to understand if the company has adequately assessed the various risks it faces. Read the briefing here.
Costly Coal: Shareholder risk in Coal India
Investors will soon be offered further equity in the Indian Government majority-owned Coal India Limited (CIL). This FPO will likely position investing in Coal India as an “opportunity” for investors in a robust emerging market, on the basis of widely held assumptions regarding India’s continued reliance on thermal coal for power generation.
However, new financial analysis based on information obtained by Greenpeace via the Right to Information Act suggests that the assumption that Indian coal will continue to be plentiful and cheap no longer holds true. Read the briefing here.
Frozen Future: US Coast Guard report
This investor briefing looks at the key findings of the US Coast Guard report into the running aground of Shell's Arctic drilling rig, the Kulluk. Shell has downplayed this as a "maritime transit incident". However, it's clear from the Coast Guard investigation that this incident highlights wider issues of risk assessment and management, indadequate procedures and risks relating to contractor selection and oversight. It points to a number of critical operational issues which must be addressed before Shell considers returning to the Alaskan Arctic.
Read the briefing here.
Frozen Future: Shell's ongoing gamble in the US Arctic
Royal Dutch Shell stands at a strategic crossroads. Its response to the reserves scandal in 2004 has been a global reserves replacement hunt through a programme of relentless capital expenditure. This search included an investment in US Arctic leases in the mid-2000s. Yet, Shell’s US offshore Arctic plans have been a failure despite capital expenditure, to date, in excess of $5bn. Following a 2012 drilling season beset by multiple operational failings and a subsequent ‘pause’ in the company’s Arctic programme, Shell announced, on 30 January 2014, a forced reversal of its intention to return to the Chukchi Sea in the summer of 2014. Read the report here.
Frozen Future: Shell's ongoing gamble in the US Arctic
The report is accompanied by an investor briefing. The briefing outlines the risks that investors may face and provides them with suggested questions to ask Shell.
Read the briefing here.
Russian Roulette: International oil company risk in the Russian Arctic
The report provides an overview of the Arctic exploration deals that have been made between an international oil company and either Rosneft or Gazprom since 2011; and examines Rosneft and Gazprom's environmental and safety performance records, along with their experience of offshore drilling at an executive and senior management level. The report also provides information on the complex and shifting political landscape in Russia, which will have a direct impact on the future of the Russian oil and gas industry.
Read the report here.
Russian Roulette - Investor Briefing
The report is accompanied by an investor briefing. The briefing outlines the risks that investors may face and proposes questions that shareholders in International Oil Companies (IOCs) should ask of these companies to clarify how such risks are being mitigated and managed.
Read the briefing here.
Out in the Cold: Serious concerns for shareholders identified by U.S. Department of Interiour review
In 2013 the U.S. Department of the Interior published a review of Shell's Arctic operations. This briefing sets out key extracts from the Review highlighting issues which should be of concern to Shell shareholders.
Read the briefing here.
Out in the Cold: Repeated Misadventures
This briefing poses key questions investors need to be asking of Shell, in the wake of the US government's announcement of a review into the Alaskan Arctic offshore drilling programme.
Read the briefing here.
Out in the cold: Shell's summer of setbacks
This briefing gives an overview of the various setbacks faced by Shell. It also examines the nature of the testing carried out on essential well capping equipment. It suggests some key questions for investors to ask Shell in the light of 2012's Arctic experience.
Read the briefing here.
Out in the Cold: Investor Risk in Shell's Arctic Exploration
This report for investors highlights the risks of Shell's proposed off-shore Arctic drilling projects in the Alaskan Arctic and in Russia. It includes analysis of the commercial viability of the projects, inadequate spill response plans and a lack of transparency. The report warns that Shell's plans for Arctic exploration expose investors to a 'spectrum of risks'.
Read the report here.
Out in the Cold: Royal Dutch Shell and Arctic Drilling
This briefing accompanies the report on Shell's Russian and Alaskan Arctic projects.
Read the briefing here.
Out in the Cold: Royal Dutch Shell and Arctic Drilling
This briefing provides SRI investors with the information they require to ask Shell key questions on Arctic drilling.
Read the briefing here.
