Oil companies are putting investors’ money at risk

Oil giants including BP and Exxon Mobil have been accused of playing ‘Russian roulette’ with investors’ money because of their links with poor performing Russian energy firms that are drilling in the Arctic.

Three campaign groups – Greenpeace, Platform, and ShareAction – have said that a number of major fossil fuels firms were providing capital and services to the two Russian energy giants, Gazprom and Rosneft, in exchange for access to new oil fields in the Arctic.

But their report, called Russian Roulette: International oil company risk in the Russian Arctic, says that both companies were known for their poor showings in terms of safety and environmental protection.

It highlights five areas of risks involved in partnerships with the Russian energy companies. These include the lack of offshore experience, poor environmental records, the disregard for safety rules, lack of transparency and political risks.

Greenpeace claims that these should concern investors, adding that their money is at risk should drilling operations in the vulnerable Arctic go wrong.

“Shareholders should be seriously concerned about what looks like a collection of open ended risks for their companies”, Charlie Kronick, a senior climate advisor at Greenpeace said.

“Drilling in Arctic waters is already a technically difficult and environmentally risky operation, but doing it in partnership with companies notorious for their poor environmental and safety record, as well as their lack of offshore expertise, is nothing short of a Russian roulette.”

In March, the US interior department banned Anglo-Dutch oil giant Shell from drilling in the Arctic until it was able to prove that it can deal with consequences of a possible spill. The company had previously announced that it would suspend its Arctic activities for the rest of 2013.

Greenpeace, ShareAction and Platform have collaborated on a briefing document, aimed specifically at investors in the big oil firms.

Further reading:

On this day in 2000: first Britons reach the Arctic unaided

International Arctic forum launched to help alleviate region’s threats

US bans Shell from Arctic drilling until safety fears are eliminated

Shell pulls out of Arctic drilling in 2013 amid safety fears