- The US oil exploration company Kerr-McGee is facing divestment and share losses as it today was known that it is to continue to explore possible hydrocarbon resources offshore Moroccan-occupied Western Sahara, now being the only international company involved in this allegedly "illegal" operation. Pro-Sahara campaigners now swear to intensify their camping against the company.
Kerr-McGee's today announced the renewal of its contract with the government of Morocco to conduct oil exploration offshore the occupied territory of Western Sahara until 29 October 2005, coinciding with the next UN Security Council debate on Western Sahara. The contract renewal had not been expected by many shareholders, who fear that the controversial involvement in an occupied territory will lead to further divestments in the company.
The US energy company is now the only international player left in Western Sahara waters, after France's Total, a Dutch and a Norwegian exploration company left the ground following massive pressure. The companies had met protests from the exiled Western Sahara government, which is recognised by the UN as the legitimate representative of the Sahrawi people.
Pro-Sahrawi campaigners from 20 countries followed up on the protests from the exiled government, contacting shareholders in those companies involved in occupied Western Sahara, asking them to divest or to put pressure on the company to withdraw from the territory. The campaigners found support in a legal document by the UN, doubting the legality of exploiting natural resources in an occupied territory.
The campaigners, now organised in the Western Sahara Resource Watch (WSRW), today announced that they will intensify their campaign against Kerr-McGee for its decision to continue this "illegal oil exploration". The group today called on all shareholders in Kerr-McGee to "immediately divest from this US corporation, which puts profits before principles and directly undermines the UN peace process in Western Sahara."
WSRW further requested all ethical investment screening companies to re-evaluate the ratings of Kerr-McGee in the light of this decision. The group said it already had contacted hundreds of shareholders in Kerr-McGee, and 30 ethical investment screening companies, to explain why Kerr-McGee's actions were "incompatible with corporate social responsibility and international law."
The pressure group already can point to some successes. On 4 May, the enormous Norwegian Petroleum Fund announced to Norway's state broadcaster that it is considering to divest from Kerr-McGee. Today's announcement by the US energy company thus probably leads to the Fund's final divestment from Kerr-McGee. The Fund holds shares estimated to be worth over US$ 31 million.
Already one major Norwegian investor - the Norwegian fund administrator Skagenfondene - has divested, taking a two million dollar loss on their 100,000 shares. They regarded the shares as too high risk, given the negative attention Kerr-McGee was attracting.
Ethical investment screening companies in several countries are now considering to blacklist the US company due to its legally dubious activities in Western Sahara. The result for shareholders in Kerr-McGee could be a steeply declining value of the company.
Investors' nervousness had already been noted shortly before today's announcement of the contract's renewal. Despite a doubling of revenues in quarterly earning from April 2004 to April 2005, US share analysts downgraded Kerr-McGee from "buy" to "hold" last week.
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