UPDATE 2-Shell investors reject challenge to oil sands

* 94 pct of shareholders vote against oil sands review

* Ethical investors, environmentalists called for review

* Shell shareholders back executive remuneration report

(Adds petition, company comments, details)

By Aaron Gray-Block

THE HAGUE, May 18 (BestGrowthStock) – Anglo-Dutch oil major Royal
Dutch Shell Plc’s (RDSa.L: )(RDSb.L: ) shareholders have rejected a
resolution challenging the company’s multi-billion dollar
investments in Canadian oil sands projects.
A group of ethical investors, environmentalists and
indigenous groups had urged Shell to reconsider its plans to
squeeze crude from Alberta’s bitumen-drenched tar sands fields.

Oil sands production produces more carbon dioxide than
traditional oil production, uses more water and typically
involves greater damage to the landscape. Charges for emitting
carbon dioxide can also prove costly for projects.

But Shell, Europe’s largest oil company by market
capitalisation, had urged investors to vote against the
resolution, saying it had already considered potential charges
for carbon dioxide in its initial business plans.

At the company’s annual shareholders meeting, a provisional
94.26 percent of investors voted against the proposal, which had
challenged Shell on the financial risks that oil sands projects
might pose.

BP Plc (BP.L: ) beat off an identical challenge to its
Canadian oil sands project last month. [ID:nLDE63E1SY]

Oil majors have come under close scrutiny as BP battles to
contain a potential environmental disaster from an oil spill in
the Gulf of Mexico, with $30 billion in value wiped off BP’s
value after an April 20 explosion on its Deepwater Horizon rig.

“The Gulf of Mexico oil spill has proven that environmental
and social risks are also financial risks,” said Catherine
Howarth, chief of campaigning organisation FairPensions, which
co-lodged the resolution.

At Tuesday’s twin shareholder meeting in The Hague and
London, almost 100 percent of shareholders had also voted in
favour of the firm’s 2009 executive pay remuneration report.

Shareholders rejected the executive pay plan last year,
prompting the company to enter talks with major shareholders,
culminating in a series of new proposals.

SHAREHOLDER GRILLING

During Tuesday’s meeting, Amnesty International presented a
petition of 175,000 signatures to Shell chief executive Peter
Voser urging the firm to provide more details about the impact
of its Nigerian operations on local communities.

Amnesty claims Shell’s operations in the Niger delta have
had a devastating impact on local communities’ health, water,
work and food.

“Amnesty is conducting a very public campaign with a number
of allegations. These are absolutely without merit,” Shell’s
Upstream International executive director Malcolm Brinded said.

Shell was also targeted with a hoax press release on Monday,
saying the firm planned to halt deepwater drilling off Nigeria
and take sweeping measures to clean up the Niger delta.

It was challenged again by both environmental groups and
Dutch pension funds on Tuesday over oil spills there and ongoing
flaring of excess gas.

Brinded said 98 percent of spills are caused by sabotage and
Shell is investing in gas gathering facilities, but gave no
deadline when the entire delta would come online. He said Shell
faces difficulties cleaning up spills due to security issues.

Addressing wider concerns, Voser also stressed Shell’s
policy of transparency, adding the company was working with the
industry on inquiries into the BP oil spill and that Shell had a
policy of open dialogue with local communities.

Voser also said the company was moving in a new direction,
with gas production due to overtake oil in terms of barrels of
oil equivalent in 2012, lowering the company’s CO2 footprint.

Prior to the AGM, a small group of protestors from Friends
of the Earth and Amnesty International had gathered outside the
theatre in The Hague where the meeting took place.
(Editing by Jon Loades-Carter and Will Waterman)

UPDATE 2-Shell investors reject challenge to oil sands