Kerr-McGee faces divestments from Western Sahara engagement

Dec 22, 2004 01:00 AM

Kerr-McGee, the only remaining oil company operating on a Moroccan contract in occupied Western Sahara, is under strong pressure to follow three other companies that have left the territory, or face major divestments.
The world's biggest public investment fund is believed to be in the process of selling out its shares in Kerr-McGee.

The US oil and gas giant Kerr-McGee signed a potentially lucrative accord with Morocco's government owned National Office of Research and Exploration (ONAREP) in September 2001 to map oil resources offshore Western Sahara, or "southern Morocco" as the deal says. Kerr-McGee joined the French oil giant Total and the two subcontracted the seismic mapping companies TGS-Nopec (Norway) and the Fugro Group (The Netherlands).
Three years later, Kerr-McGee is operating alone off the costs of Western Sahara. TGS-Nopec in 2003 withdrew from the region after a long protest campaign over the company's unethical engagement caused massive divestment and falling share prices.

Fugro followed pace this year under threats of a similar faith as TGS-Nopec. In end-November, even the oil giant Total withdrew from Western Sahara, officially because there was no oil to be found there.
The Oslo-based activist group of the Western Sahara Support Committee however claimed that Total's withdrawal from the Moroccan-occupied territory was a result of their campaigning. Now, Erik Hagen of the Norwegian group is heading the campaign against Kerr-McGee's engagement in Western Sahara. First divestments in the US oil giant have already occurred.

Kerr-McGee is already excluded from one of Norway's main private investment funds, Skagen Vekst. Despite a significant loss, Skagen in 2003 sold its shares worth NOK 30 mm (EUR 3.6 mm) in the oil company, referring to ethic problems surrounding Kerr-McGee's engagement in Western Sahara.
Next in line is the world's biggest public investment fund, the Norwegian Petroleum Fund, which according to the Bank of Norway had a combined market value "of NOK 988.1 bn [EUR 120 bn] at the end of the third quarter" this year. The Petroleum Fund, which only publishes its assets once a year, on 31 December 2003 held 0.15 % of all shares in Kerr-McGee, worth NOK 46.6 mm (EUR 5.6 mm).

The Petroleum Fund has not publicly announced its divestment in Kerr-McGee, but this is probably only a matter of time, according to Norwegian politicians. The Fund since 1 December is governed by ethical guidelines, established by a government commission. In the commission's analysis, Western Sahara is the only country specifically mentioned, in reference to the ethical aspects of oil explorations there.
Already the day before the ethical guidelines took effect, Norway's Finance Minister Per-Kristian Foss was put under pressure to use Kerr-McGee to set a warning example. Mr Hagen of the Western Sahara Support Committee in a letter to the Minister said that "only through selling, the Petroleum Fund can demonstrate that it is not supporting Kerr-McGee 's ... strongly unethical ... engagement in Western Sahara."

A letter from Mohamed Salem Ould Salek, the Foreign Minister of the exiled Saharawi republic, probably impressed Minister Foss even more. The Saharawi Minister reminded Mr Foss that the Norwegian government "owns substantial shares" in Kerr-McGee, a company that had signed a contract with Morocco "in clear violation of international law and the wishes of the Saharawi people."
"We would like to take this opportunity to call on the Norwegian government, as a part owner of Kerr-McGee, to consider ending its involvement with this company, wrote Minister Ould Salek. "We believe that the strict implementation of the ethical guidelines of the Petroleum Fund will deter this company which is acting in violation to international law and to the wishes of our people," the official letter added.

Minister Foss was asked by the opposition in the Norwegian parliament if he would "instruct the Petroleum Fund to sell its shares [in Kerr-McGee] on ethical grounds," given that other funds already had withdrawn from the US oil company "due to increased risk of international condemnation of the occupation."
Mr Foss could confirm that the case of Kerr-McGee had already been sent to the Fund's ethical council for specific consideration. A decision would soon be gazetted, he added. Observers in Oslo hold that this probably means that the Petroleum Fund is already divesting from Kerr-McGee in order not to make losses due to share depreciations often produced by a sudden big sell-out.

Mr Hagen told that the Western Sahara Support Committee currently is focusing its campaign against Kerr-McGee's Western Sahara engagement in Norway. After the expected divestment by the Petroleum Fund, however, the campaign will be led at an international level, using the Fund as an example.
Kerr-McGee so far has not shown any signs of giving in to the increased pressure and divestments. The oil company's contract with Moroccan authorities originally expired on 19 October, as was the case with Total's contract. Press spokesman John Christiansen earlier however confirmed that Kerr-McGee's contract with Morocco had been "extended until 1 May 2005."

Source: LiquidAfrica
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« October 2019 »
October
MoTuWeThFrSaSu
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31

Register to announce Your Event

View All Events