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Shell Advises Holders To Reject Oil Sands Resolution

THE WALL STREET JOURNAL

APRIL 12, 2010

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB) has advised its shareholders to vote down at its annual general meeting in May a resolution requiring the company to conduct a thorough review into the commercial viability and environmental sustainability of its Canadian oils sands operations, according to documents posted on its Web site Monday.

The resolution was sponsored by a number of activist investors, led by the group Fair Pensions, who are challenging the viability of oil sands largely on environmental grounds.

“Resolution 23 is not in the best interests of the company and its shareholders as a whole and unanimously recommend that you vote against,” said Shell.

The resolution demands Shell “address our concerns for the long term success of the company arising from the risks associated with oil sands, we as shareholders of the company direct that the Audit Committee or a Risk Committee of the Board commissions and reviews a report setting out the assumptions made by the Company in deciding to proceed with oil sands projects.”

The resolution asks the committee to consider the impact on the viability of oil sands of future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods.

Shell said it is already applying stringent economic and environmental considerations to its oil sands operations and the bulk of the information requested in the resolution has already been disclosed. By approving the resolution shareholders would be setting a precedent that, if applied to other Shell investments, could add “unnecessary costs and duplication of effort,” Shell said.

The other major U.K.-listed oil company, BP PLC (BP), faces a similar resolution at its AGM Thursday.

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected]

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