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Anglo-Dutch oil major Royal Dutch Shell Plc's 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 capitalization, 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 beat off an identical challenge to its Canadian oil sands project last month.

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 organization 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 favor 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.

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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 theater in The Hague where the meeting took place.

Source: Reuters

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