Oil giants "underestimating investor risk" on tar sands, says new Greenpeace report



    
    Unconventionals "could be to the oil industry what sub-prime lending was
    to the banking sector"
    

    LONDON, UK, Sept. 16 /CNW Telbec/ - A new report by Greenpeace UK was
released internationally today, warning of increasing financial risk for UK
oil giants BP and Shell, who have invested heavily in the Alberta tar sands.
    The report, co-authored by Greenpeace and PLATFORM and entitled BP and
Shell, Rising Risks in Tar Sands Investment, has won the backing of several
influential investment firms including Holden and Partners, Innovest, and
Co-operative Asset Management. The report claims that shortfalls in the
strategic reserves of BP and Shell are leading to a 'distortion of management
perspectives', resulting in potentially catastrophic underestimates of risk.
    "We always knew that tar sands were a risk to the climate, but now it's
becoming clear that they're a risk to the bottom line as well," said Mike
Hudema, Greenpeace tar sands campaigner. "Albertans should be aware of the
monstrous economic risks that their government is taking on their behalf."
    The report is released on the same day that a number of large investment
funds, senior analysts and financial advisors meet in London to criticize the
long term strategy of the oil majors. Both BP and Shell have become
increasingly involved in the production of oil derived from the Alberta tar
sands. The sector now accounts for some 30 per cent of Shell's proven
reserves.
    The report examines a number of factors which threaten the long term
profitability of the sector:

    
    - Low carbon fuel standards under consideration by US presidential
      candidate Barack Obama and already implemented in California threaten
      to close sections of the American market to products derived from tar.

    - Acute labour shortages and the rising cost of delivering gas to the tar
      sands threaten to stifle the planned expansion of the sector.

    - An unrealistic reliance on untested carbon capture and storage (CCS)
      technology risks leaving the companies with huge stranded assets in the
      future, as international climate change regulations are strengthened at
      Copenhagen next year.

    - The extensive clean up operation and potential future litigation from
      local communities carry significant brand risk.
    

    "The idea that oil sands will enhance energy security is delusional,"
said Andrew Dlugolecki, Director of Andlug Consulting in the UK. "Investors
should do all they can to challenge this misguided use of shareholders' money,
which will make global warming worse, and instead call for a new approach that
is based on the reality of climate change."

    For a full copy of the report visit
    http://www.greenpeace.org.uk/risingrisks




For further information:

For further information: Mike Hudema, Tar Sands Campaigner, (780)
504-5601; Jessica Wilson, Media and Public Relations Officer, (778) 228-5404


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